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[LOGO OF MASSMUTUAL]
MASSMUTUAL
Corporate Investors
1999 ANNUAL REPORT
UNMATCHED
Integrity
STRONG
Performance
SOLID
FOUNDATION
<PAGE>
INVESTMENT OBJECTIVE AND POLICY
MassMutual Corporate Investors, a closed-end investment company, was offered to
the public in September 1971 and its shares are listed on the New York Stock
Exchange. The share price of Corporate Investors can be found in the financial
section of most newspapers as "MasCp" or "MassMuInv" under the New York Stock
Exchange listings. The trading symbol is "MCI".
The Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield at the same time offering an opportunity for capital
gains. The principal investments are long-term corporate debt obligations and
occasionally preferred stocks purchased directly from issuers. These provide a
fixed yield and potential capital gains through warrants, conversion rights, or
other equity features which are a prerequisite to every private placement
purchased.
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 Annual Report.
The Trust holds investments in a number of companies that are not publicly
traded at this time. Capital gains may be realized on holdings of private
companies through various methods, including directly negotiated sales, put
options and initial public offerings of stock.
The Trust pays quarterly dividends and intends to distribute substantially all
of its net income to shareholders each year. All distributions are paid in cash
unless the shareholder elects to participate in the Dividend Reinvestment and
Share Purchase Plan.
Dividends are distributed in January, May, August and November.
MassMutual Corporate Investors' Annual Meeting of Shareholders is scheduled to
be held on April 28, 2000 at 2:00 p.m. in Springfield, Massachusetts. We
cordially invite all shareholders to attend.
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TABLE OF CONTENTS
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To Our Shareholders ..........................................................1
Tax Information ..............................................................4
Statement of Assets and Liabilities ..........................................6
Statement of Operations ......................................................7
Statement of Cash Flows ......................................................8
Statement of Changes in Net Assets ...........................................9
Selected Per Share Data .....................................................10
Schedule of Investments ..................................................11-27
Notes to Financial Statements ............................................28-30
Independent Auditors' Report ................................................31
MASSMUTUAL CORPORATE INVESTORS
1295 State Street
Springfield, Massachusetts 01111-0001
(413) 744-8480 . www.massmutual.com/mci
ADVISER
David L. Babson and Company, Incorporated
AUDITOR
Deloitte & Touche LLP
New York, New York 10281
CUSTODIAN
The Chase Manhattan Bank, N.A.
TRANSFER AGENT & REGISTRAR
Shareholder Financial Services, Inc.
P.O. Box 173673,
Denver, Colorado 80217-3673
1-800-647-7374
[LOGO OF MCI]
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TO OUR
Shareholders
Photo of
Robert E. Joyal, CFA
President
Highlights of the Trust's results this year included increased net investment
income, new private placement investments and short-term capital gains resulting
in a special $1.03 per share dividend in addition to significant long-term gains
retained by the Trust.
It is a pleasure to present to you MassMutual's Corporate Investors' Annual
Report covering the year ended December 31, 1999. Highlights of the Trust's
results this year included increased net investment income, new private
placement investments and short-term capital gains resulting in a special $1.03
per share dividend in addition to significant long-term gains retained by the
Trust.
REVIEW OF 1999
The current economic expansion, which began in the summer of 1991, will become
the longest in the nation's history in the first quarter of 2000. The real rate
of GDP growth in 1999 will exceed 4 percent but is unlikely to match the 4.6
percent rate of 1998. Still coming so late in the expansion it is genuinely
impressive, and all the more so since price gains have remained moderate despite
a sharp rise in oil prices.
1999 was a difficult year for bond funds in general. The year was characterized
by an increasing interest rate environment. The yield on 10-year Treasuries
increased from 4.65% on December 31, 1998 to 6.44% on December 31, 1999. The
Lehman Brothers Government/Corporate Bond Index and the Merrill Lynch High
Yield Bond Index returned -2.15% and 1.57% for the year, respectively. The S&P
Industrial Stock Index returned 25.89% for the year, fueled largely by the
technology sector.
MASSMUTUAL CORPORATE INVESTORS
Summary Financial Information
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YEAR ENDED PER YEAR ENDED PER
DECEMBER 31, 1999 SHARE DECEMBER 31, 1998 SHARE
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Total net assets $188,960,760 $22.00 $205,019,403 $23.87
Net investment income $ 15,435,683 1.80 $ 13,846,000 1.62
Realized gain $ 29,791,363 3.47 $ 19,546,596 2.28
Change in unrealized
appreciation/depreciation $(30,341,829) (3.53) $ (841,905) (0.10)
Shares outstanding 8,587,495 8,587,495
Key Ratios:
Ratio of total expenses
to average net assets 1.82% 2.14%
Ratio of operating expenses
to average net assets 1.30% 1.62%
Portfolio turnover 68% 60%
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1
<PAGE>
Photo of
Stuart H. Reese, CFA
Chairman
UNMATCHED
Integrity
Photo of
Charles C. McCobb, CFA
Vice President and
Chief Financial Officer
The Trust's total return, which is calculated based on earnings and change in
net asset value, was 7.53% for the year. Net assets decreased to $188,960,760 or
$22.00 per share on December 31, 1999 from $205,019,403 or $23.87 the previous
year.
1999 was another very active year for the Trust in terms of private placement
activity. During the year the Trust closed on fourteen new private placement
investments and completed additional fundings of eight existing private
companies. During the fourth quarter the Trust added Directed Electronics, Inc.,
Fasteners for Retail, Inc., Nexell Therapeutics, Piping Supply Holdings, Inc.
and Snyder Industries, Inc. (A brief description of each of these investments is
provided in the Schedule of Investments). The fixed income portions of these
investments have a weighted average coupon of approximately 12.4%.
As of December 31, 1999, private placement investments accounted for
approximately 73% of the Trust's investments and increased to approximately 85%
(based on market value) by the end of January. Private placements are the
principal investment vehicle of the Trust and typically contain a fixed income
component along with a call on the issuer's equity.
For the three months ended December 31, 1999, net investment income was
$3,698,382 or $.44 per share, down from $4,072,977 or $.47 per share for the
prior quarter. For the year net investment income increased significantly to
$15,435,683 or $1.80 per share compared to $13,846,000 or $1.62 per share a year
ago.
This was not only an outstanding year for the Trust in terms of new investment
activity but also for the realization of gains from investments made in prior
years. For the year ended December 31, 1999 the Trust realized over $29.7
million of gains or $3.47 per share. Some of the more notable gains included
Mercury Computer Systems, Control Devices, Inc., Lloyd's Barbecue Company and
Ardent Software.
Mercury Computer Systems is a designer and manufacturer of computer systems. We
originally purchased a convertible note back in 1987. This year Mercury
accounted for more than $10 million of the gains and the remainder of our
holdings in Mercury were sold in January for an additional $2 million in gains.
In total, the Trust realized approximately $15 million of gains on our original
$1.5 million investment in Mercury.
Control Devices, Inc. is a producer of electromechanical circuit protection
devices and photo-optic sensors. Our original investment of $2.7 million dates
back to 1994 and consisted of a revolving credit facility, senior and
subordinated notes along with common stock and warrants. The notes were prepaid
in 1996. In March of this year the common shares were sold to a strategic buyer
for $16.25
2
<PAGE>
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TOTAL
Annual Return
[CHART]
Lehman Brothers
MassMutual Corporate S&P Industrial Government/Corporate
Investors Stock Index Bond Index
1995 33.76 34.64 19.24
1996 15.42 23.03 2.90
1997 27.14 31.04 9.75
1998 17.12 33.77 9.46
1999 7.53 25.89 -2.15
per share. Our cost basis in this security was approximately $0.09 per share,
giving the Trust a gain of $4.7 million.
Lloyd's Barbecue Company is a manufacturer and marketer of packaged barbecue
meats and related products. We originally purchased $3.5 million of subordinated
notes and partnership interests in September of 1997. In early 1999, Lloyd's was
sold to multinational food company for a gain of over $4 million on our original
investment.
We invested $3 million in Ardent Software in 1995 under the name Unidata, Inc.
Unidata was a manufacturer and distributor of database management software. In
1998 Unidata was merged into Vmark Software and was renamed Ardent Software,
Inc. At that time our notes were prepaid and we exercised our warrants. During
the course of 1999, we sold our holdings of Ardent common stock for a gain of
$1.5 million.
Photo of
Stephen L. Kuhn
Vice President and Secretary
PREVIEW OF 2000
Several factors could combine to alter the economic picture in 2000. First,
while it should be another good year, the economy may not be as strong as it was
in 1999. Second, Fed policy will continue to dominate the behavior of financial
markets and the Fed is likely to insist on slowing the economy's growth pace,
despite the fact it is an election year. Third, interest rates are expected to
rise, and stocks could find the going more difficult.
The early signs of a slower economic growth pace have already begun to emerge.
The housing sector is showing lower housing starts and sales of new and existing
houses and non-farm payroll growth did not match that of 1998. However, the
slowing should be relatively orderly and growth for the year should not be far
below the 3.6 percent average growth rate recorded in the 1992-1999 period.
Photo of
Clifford M. Noreen
Vice President
SOLID
FOUNDATION
3
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Photo of
Mark B. Ackerman, CFA
Treasurer
ORGANIZATIONAL CHANGE
On January 1, 2000 the investment management organization of Massachusetts
Mutual Life Insurance Company (MassMutual) was consolidated into David L. Babson
and Company, a federally registered investment adviser located in Cambridge, MA.
Following reorganization, Babson has approximately $66 billion in assets under
management.
MassMutual owns and controls more than 95% of Babson's voting stock and the
investment professionals of MassMutual are now employees of Babson. The
Investment Services Contract of MassMutual Corporate Investors has been assigned
to Babson. The fund continues to be managed by the same individuals who will
remain in Springfield. As a result, there will be no change in the level of
service currently provided.
Sincerely,
Robert Joyal
President
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TAX
Information
The following table summarizes, for income tax purposes, the cash distributions
paid by MassMutual Corporate Investors for the calendar year 1999.
<TABLE>
<CAPTION>
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1999 DIVIDEND PAYMENTS RECORD DATE NET INVESTMENT INCOME SHORT-TERM GAINS TAX EFFECT
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Regular 05/05/99 0.3805 0.0295
07/30/99 0.4300 --
10/29/99 0.4300 --
12/31/99 0.4300 --
Extra 12/31/99 0.0562 0.9738
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Total Dividends 1.7267 1.0033 2.73 represents
income for tax
purposes
<CAPTION>
The following table summarizes the tax effects of the retention of long-term capital gains for 1999.
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AMOUNT PER SHARE FROM 2439
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<S> <C> <C>
1999 Gains Retained $2.4953 Line 1a
Long-term Gains Retained (20%) 2.4953
Taxes Paid 0.8734 Line 2*
Basis Adjustment 1.6220 **
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* If you are not subject to federal tax (e.g., a charitable organization, IRA, or Keogh Plan), you may
be able to claim a refund by filing Form 990-T.
** For federal tax purposes, you may increase the adjusted basis of your shares by this amount (the
excess of Line 1a over Line 2).
<CAPTION>
ANNUAL DIVIDEND QUALIFIED FOR DIVIDEND INTEREST EARNED ON
RECEIVED DEDUCTION U.S. GOVERNMENT OBLIGATIONS
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AMOUNT PER SHARE PERCENT AMOUNT PER SHARE PERCENT AMOUNT PER SHARE
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<S> <C> <C> <C> <C>
$2.73 3.3503% $0.091465 0.0000% $0.0000
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</TABLE>
4
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ANALYST
Review
Photo of
Richard C. Morrison
Vice President
Richard C. Morrison is a Vice President and senior analyst of the Trust. Dick
has had the pleasure of being actively involved in the formation of the fund in
the early 1970's, as well as having made many of the investments for the Trust
over the ensuing years. Dick takes particular pride and enjoyment over the fact
that the original idea of the Trust to invest in private placement with equity
features was attractive then and continues to be the core of the Trust's
portfolio.
From an analytical viewpoint, prior to any investment, we perform an extensive
analysis and evaluation of the company and its industry, from both an historical
and a future perspective. We look for companies and industries that generate
meaningful and stable cash flow and we focus on a company's debt load in
relation to the cash it generates. We invest in companies that provide products
or services which are highly valued and which have the potential for serious
growth in the years ahead. We place particular emphasis on the management teams
of the companies in which we invest, since good people with proven track records
within their industry, who have a total commitment to their business, are the
ones who generally excel and provide healthy returns on our investments.
Our decades-long presence in the private placement market has allowed us to
build a very large network of contacts and relationships with the investment
banking community and particularly with private investment firms which organize
and invest in the acquisition of select, well-established middle market
companies. These groups value relationship investing and appreciate our
responsiveness and long-term investment perspective and they provide us with an
ongoing flow of attractive investments for the Trust.
STRONG
Performance
5
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CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
MASSMUTUAL CORPORATE INVESTORS
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December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
======================================================================================================================
ASSETS:
<S> <C> <C>
Investments (Notes 2A, 2B and 5)
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost 1999 -- $194,367,359; 1998 -- $150,144,259) $174,084,140 $166,668,053
Corporate public securities at market value
(Cost 1999 -- $32,405,364; 1998 -- $54,981,122) 37,418,479 53,528,875
Short-term securities at market value
(Cost 1999 -- $14,092,027; 1998 -- $8,305,621) 14,091,849 8,305,621
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225,594,468 228,502,549
Cash 209,184 4,056,616
Interest and dividends receivable, net 3,667,973 3,957,449
Receivable for investments sold 217,412 1,201,590
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Total assets $229,689,037 $237,718,204
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LIABILITIES:
Dividend payable $ 12,537,743 $ 6,097,121
Management fee payable (Note 3) 473,586 511,849
Note payable (Note 4) 20,000,000 20,000,000
Interest payable (Note 4) 136,211 136,211
Accrued expenses 80,738 132,720
Accrued taxes (Note 2D) 7,499,999 5,820,900
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Total liabilities 40,728,277 32,698,801
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NET ASSETS:
Shares of beneficial interest, par value $1.00 per share; an unlimited number authorized 8,587,495 8,587,495
Additional paid-in capital 96,064,219 96,064,219
Retained net realized gain on investments, prior years 84,627,528 73,493,074
Undistributed net investment income (Note 2D) 1,023,228 770,118
Undistributed net realized gain on investments (Note 2D) 13,928,572 11,032,950
Net unrealized appreciation (depreciation) of investments (Note 2A, 2B and 5) (15,270,282) 15,071,547
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Total net assets 188,960,760 205,019,403
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Total liabilities and net assets $229,689,037 $237,718,204
======================================================================================================================
Shares of beneficial interest issued and outstanding 8,587,495 8,587,495
======================================================================================================================
Net asset value per share $ 22.00 $ 23.87
======================================================================================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
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CONSOLIDATED STATEMENT OF OPERATIONS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
For the years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
===================================================================================================
INVESTMENT INCOME (NOTE 2B):
<S> <C> <C>
Interest $ 18,344,363 $17,469,339
Dividends 785,458 756,457
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Total income 19,129,821 18,225,796
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EXPENSES:
Management fee (Note 3) 2,013,708 2,883,052
Trustees' fees and expenses 136,706 125,493
Transfer Agent/Registrar's expenses 114,000 60,000
Interest (Note 4) 1,066,000 1,066,000
Reports to shareholders 48,000 24,000
Audit and legal 58,500 55,018
Other 257,224 166,233
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Total expenses 3,694,138 4,379,796
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Net investment income (1999 - $1.80 per share; 1998 - $1.62 per share) 15,435,683 13,846,000
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 2A AND 2B):
Realized gain on investments 29,791,363 19,546,596
Provision for federal income taxes (Note 2D) (7,499,999) (5,820,900)
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Net realized gain on investments 22,291,364 13,725,696
Net change in unrealized appreciation/depreciation of investments (30,341,829) (841,905)
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Net gain (loss) on investments (8,050,465) 12,883,791
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Net increase in net assets resulting from operations $ 7,385,218 $26,729,791
===================================================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
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CONSOLIDATED STATEMENT OF CASH FLOWS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
For the years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
===================================================================================================
NET INCREASE (DECREASE) IN CASH:
<S> <C> <C>
Cash flows from operating activities:
Interest and dividends received $ 18,499,291 $ 17,130,326
Interest expense paid (1,066,000) (1,066,000)
Operating expenses paid (2,718,382) (3,545,212)
Federal income tax paid (5,830,116) (8,639,902)
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Net cash provided by operating activities 8,884,793 3,879,212
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Cash flows from investing activities:
Change in short-term portfolio securities, net (5,481,456) (5,253,065)
Purchase of portfolio securities (146,353,410) (132,271,918)
Proceeds from disposition of portfolio securities 156,105,881 153,330,192
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Net cash provided by investing activities 4,271,015 15,805,209
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Net cash provided by operating and investing activities 13,155,808 19,684,421
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Cash flows from financing activities:
Cash dividends paid from net investment income (14,039,030) (11,795,057)
Cash dividends paid from net realized gain on investments (2,964,210) (3,913,059)
- ---------------------------------------------------------------------------------------------------
Net cash used for financing activities (17,003,240) (15,708,116)
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Net increase (decrease) in cash (3,847,432) 3,976,305
Cash -- beginning of year 4,056,616 80,311
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Cash -- end of year $ 209,184 $ 4,056,616
===================================================================================================
RECONCILIATION OF NET INCREASE (DECREASE) IN NET ASSETS
TO NET CASH FROM OPERATING AND INVESTING ACTIVITIES:
Net increase in net assets resulting from operations $ 7,385,218 $ 26,729,791
- ---------------------------------------------------------------------------------------------------
Increase (decrease) in investments 2,908,081 (2,416,013)
Increase (decrease) in interest and dividends receivable, net 289,476 (387,060)
Increase (decrease) in receivable for investments sold 984,178 (1,041,878)
Decrease in payable for investments purchased -- (150,000)
Decrease in management fee payable (38,263) (211,370)
Decrease in accrued expenses (51,981) (20,047)
Increase (decrease) in accrued taxes 1,679,099 (2,819,002)
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Total adjustments to net assets from operations 5,770,590 (7,045,370)
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Net cash provided by operating and investing activities $ 13,155,808 $ 19,684,421
===================================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
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CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
For the years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS: 1999 1998
=================================================================================================================
OPERATIONS:
<S> <C> <C>
Net investment income $ 15,435,683 $ 13,846,000
Net realized gain on investments 22,291,364 13,725,696
Net change in unrealized appreciation/depreciation of investments (30,341,829) (841,905)
- -----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 7,385,218 26,729,791
Net increase in shares of beneficial interest transactions -- 1,804,273
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (1999 - $1.73 per share; 1998 - $1.60 per share) (14,827,741) (13,662,200)
Net realized gains on investments (1999 - $1.00 per share; 1998 - $0.31 per share) (8,616,121) (2,710,879)
- -----------------------------------------------------------------------------------------------------------------
Total increase (decrease) (16,058,643) 12,160,985
Net Assets, beginning of year 205,019,403 192,858,418
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Net Assets, end of year (including undistributed net investment
income in 1999 -- $1,023,228; 1998 -- $770,118) $188,960,760 $205,019,403
=================================================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
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CONSOLIDATED SELECTED PER SHARE DATA
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
Selected data for each common share outstanding:
<TABLE>
<CAPTION>
For the years ended December 31,
================================================================================================================================
1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year $ 23.87 $ 22.65 $ 20.23 $ 19.80 $ 16.47 $ 17.47 $ 15.38 $ 14.37 $ 13.37 $ 14.74
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income 1.80 1.62 1.49 1.32 1.32 1.16 1.08 1.11 1.40 1.35
Net realized and unrealized
gain (loss) on investments (0.94) 1.51 2.87 0.92 3.88 (0.76) 2.41 1.30 1.00 (1.32)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 0.86 3.13 4.36 2.24 5.20 0.40 3.49 2.41 2.40 0.03
- --------------------------------------------------------------------------------------------------------------------------------
Dividends from net
investment income to
common shareholders (1.73) (1.60) (1.42) (1.35) (1.32) (1.16) (1.08) (1.12) (1.40) (1.32)
Distributions from net
realized gain on investments
to common shareholders (1.00) (0.31) (0.52) (0.46) (0.55) (0.24) (0.32) (0.28) -- (0.08)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.73) (1.91) (1.94) (1.81) (1.87) (1.40) (1.40) (1.40) (1.40) (1.40)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value:
End of year $ 22.00 $ 23.87 $ 22.65 $ 20.23 $ 19.80 $ 16.47 $ 17.47 $ 15.38 $ 14.37 $ 13.37
- --------------------------------------------------------------------------------------------------------------------------------
Per share market value:
End of year $ 21.38 $ 23.31 $ 25.75 $ 19.25 $ 17.88 $ 15.57 $ 14.88 $ 13.07 $ 14.00 $ 10.63
================================================================================================================================
Total investment return
Market value 7.35% 0.77% 52.43% 22.44% 29.19% 14.03% 24.84% 3.18% 45.83% (4.15)%
Net asset value 7.53% 17.12% 27.14% 15.42% 33.76% 2.36% 23.41% 17.36% 18.27% 0.42%
Net assets (in millions):
End of period $188.96 $205.02 $192.86 $172.27 $168.56 $140.20 $148.70 $131.00 $122.30 $113.80
Ratio of operating expenses
to average net assets 1.30% 1.62% 1.69% 1.70% 1.78% 1.76% 1.63% 1.27% 1.44% 1.51%
Ratio of interest expense
to average net assets 0.52% 0.52% 0.56% 0.61% 0.67% 0.72% 1.30% 1.42% 1.33% 1.39%
Ratio of total expenses
to average net assets 1.82% 2.14% 2.25% 2.31% 2.45% 2.48% 2.93% 2.69% 2.77% 2.90%
Ratio of net investment
income to average
net assets 7.63% 6.76% 6.66% 6.44% 7.09% 6.75% 6.61% 7.44% 9.70% 9.33%
Portfolio turnover 68.04% 60.14% 66.23% 64.89% 66.90% 46.68% 76.01% 60.59% 45.96% 23.74%
================================================================================================================================
</TABLE>
All per share amounts have been restated after giving effect to the two-for-one
split on the Trust's common shares authorized on December 19, 1997 effective
January 20, 1998.
See Notes To Financial Statements.
10
<PAGE>
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CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Warrants or Acquisition Acquisition Cost at 12/31/99
Corporate Restricted Securities--92.13%: (A) Principal Amount Date Date (Note 2B) (Note 2A)
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Private Placement Investments -- 87.13%
A T I ACQUISITION CORPORATION
A manufacturer of disposable nonwoven protection products.
Senior Floating Rate Revolving Credit
Note due 2003 $ 715,909 12/16/98 $ 715,909 $ 715,909 $ 715,909
10% Senior Secured Note due 2006 $ 2,068,183 12/16/98 2,068,183 2,068,183 1,992,074
12% Subordinated Note due 2008 $ 1,590,910 12/16/98 1,495,455 1,495,455 1,502,137
Common Stock (B) 318,182 shs. 12/16/98 318,182 318,182 254,545
Warrant, exercisable until 2008, to purchase
common stock at $1 per share (B) 227,273 shs. 12/16/98 95,452 95,455 2,273
- ----------------------------------------------------------------------------------------------------------------------------------
4,693,181 4,693,184 4,466,938
---------------------------------------------
ACCTECH , LLC
A designer and marketer of specialized cleaning products.
Senior Floating Rate Revolving Credit
Note due 2002 (B) $ 812,520 10/31/96 812,520 812,520 40,626
Senior Secured Series A Floating Rate
Note due 2002 (B) $ 693,444 10/31/96 683,050 693,444 34,672
10.1% Senior Secured Series A Note
due 2002 (B) $ 1,040,167 10/31/96 1,013,538 1,040,167 52,008
12% Senior Secured Series B Note
due 2004 (B) $ 1,098,000 10/31/96 1,155,206 988,200 54,900
Membership Interests (B) 5.34% int. 10/31/96 264,080 124,136 --
Warrant, exercisable until 2004, to purchase
membership interests at $.01 per interest (B) 3 int. 10/31/96 -- 109,800 --
- ----------------------------------------------------------------------------------------------------------------------------------
3,928,394 3,768,267 182,206
---------------------------------------------
ADVENTURE ENTERTAINMENT CORPORATION
An owner and operator of themed family entertainment centers.
19% Senior Subordinated Note due 2004 $ 197,492 12/9/99 196,880 197,492 196,149
7% Redeemable Series B Preferred Stock 1,938 shs. 10/31/97 188,868 1,912,897 1,746,225
Warrant, exercisable until 2005, to purchase
Class A common stock at $.01 per share (B) 6,447 shs. 10/31/97 64 25,005 64
- ----------------------------------------------------------------------------------------------------------------------------------
385,812 2,135,394 1,942,438
---------------------------------------------
ALPHA SHIRT COMPANY
A domestic distributor of imprintable apparel and other related items.
12% Senior Subordinated Note due 2007 $ 3,181,500 4/30/99 3,162,411 2,726,435 3,081,600
Common Stock (B) 1,060 shs. 4/30/99 953,955 1,059,950 953,955
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 576 shs. 4/30/99 6 477,225 6
- ----------------------------------------------------------------------------------------------------------------------------------
4,116,372 4,263,610 4,035,561
---------------------------------------------
AMERICA'S BODY CO./LCP HOLDING CO.
A designer and manufacturer of commercial work vehicles.
12% Senior Subordinated Note Due 2007 $ 3,500,000 11/2/98 2,986,665 3,023,829 3,456,600
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 58 shs. 11/2/98 513,333 513,333 1
- ----------------------------------------------------------------------------------------------------------------------------------
3,499,998 3,537,162 3,456,601
---------------------------------------------
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
===============================================================================================================================
<S> <C> <C> <C> <C> <C>
APPLIED PROCESS SOLUTIONS, INC.
An engineer and manufacturer of process systems for the oil and gas industry.
Common Stock (B) 297 shs. 10/26/95 $ 297 $ -- $ 48,017
Limited Partnership Interests of
Maloney Holding L.P. (B) 8.11% int. 10/20/95 506,250 665,481 531,877
Limited Partnership Interests of
APS Growth L.P. (B) 4.00% int. 9/28/98 682,583 800,000 640,000
- -----------------------------------------------------------------------------------------------------------------------------
1,189,130 1,465,481 1,219,894
------------------------------------------
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 3,274,636 3,216,617 166,750
Common Stock (B) 31,350 shs. 3/19/97 123,750 165,000 --
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 94,107 shs. 3/19/97 94,107 173,346 --
- -----------------------------------------------------------------------------------------------------------------------------
3,492,493 3,554,963 166,750
------------------------------------------
AVERSTAR, INC.
A provider of software systems, services and products to a variety of information technology users.
13% Senior Subordinated Note due 2005 $ 799,318 8/31/95 813,520 727,298 811,947
Class A Common Stock (B) 13,453 shs. 8/31/95 15,799 18,384 33,901
Class B Common Stock (B) 37,200 shs. 8/31/95 43,689 50,837 93,744
Class G Common Stock (B) 96,846 shs. 8/31/95 113,733 104,000 244,051
Class A Common Stock of I E S Holdings (B) 2,941 shs. 2/27/98 -- -- 29
Class B Common Stock of I E S Holdings (B) 8,134 shs. 2/27/98 -- -- 81
Warrant, exercisable until 2002, to purchase
common stock of I E S Holdings at
$.01 per share (B) 21,176 shs. 2/27/98 -- -- 212
- -----------------------------------------------------------------------------------------------------------------------------
986,741 900,519 1,183,965
------------------------------------------
BETA BRANDS, INC. -- T.S.E.
A manufacturer of hard candy and chocolate-coated products sold primarily to the Canadian market
Senior Secured Revolving Credit Note due 2005 $ 1,481,000 12/23/97 1,481,000 1,481,000 740,500
Senior Secured Tranche A Floating Rate
Note due 2004 $ 2,294,000 * 2,273,813 2,294,000 1,147,000
17.75% Senior Secured Tranche B Note
due 2005 $ 685,085 12/23/97 712,488 685,085 342,543
Limited Partnership Interests of
CM Equity Partners (B) 6.27% int. 12/22/97 6,489 783,881 195,978
Warrant, exercisable until 2005, to purchase
common stock at $.81 per share (B) 214,419 shs. 12/23/97 2,144 -- 2,144
- -----------------------------------------------------------------------------------------------------------------------------
4,475,934 5,243,966 2,428,165
------------------------------------------
BETTER MINERALS & AGGREGATES
A producer of high grade industrial and specialty silica sands.
14 % Redeemable Preferred Stock 660 shs. 9/30/99 531,467 531,733 534,062
Redeemable Preferred Stock Series A (B) 42,001 shs. 12/19/96 291,673 388,898 369,453
Convertible Preferred Stock Series B, convertible
into Series B common stock at $9.26 per share (B) 84,002 shs. 12/19/96 583,352 777,802 738,907
Common Stock (B) 20,027 shs. 9/30/99 719,161 799,068 719,161
Warrants, exercisable until 2005 and 2010, to
purchase Series A and B preferred stock and
common stock at $.01 per unit (B) 11,399 shs. ** 12,963 128,502 7,284
- -----------------------------------------------------------------------------------------------------------------------------
2,138,616 2,626,003 2,368,867
------------------------------------------
</TABLE>
*12/23/97 and 1/31/99
**12/19/96 and 9/30/99
12
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal 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 $ 652,244 8/29/96 $ 652,244 $ 652,244 $ 195,673
Senior Secured Series A Floating Rate
Term Note due 2002 $ 2,183,497 8/29/96 2,160,133 2,183,497 655,049
12% Series B Term Note due 2004 $ 533,000 8/29/96 524,738 514,353 159,900
Membership Interests (B) 5.63% int. 8/29/96 212,800 125,750 12,562
Warrant, exercisable until 2004, to purchase
membership interests at $.01 per interest (B) 36 int. 8/29/96 2 26,650 --
- ------------------------------------------------------------------------------------------------------------------------------
3,549,917 3,502,494 1,023,184
-------------------------------------------
CAINS FOODS, L.P.
A producer of mayonnaise, sauce and pickle products for both the retail and food service markets.
Senior Secured Floating Rate Revolving Credit
Note due 2005 $ 1,210,810 9/29/95 1,210,810 1,210,810 1,197,854
10% Senior Secured Term Note due 2004 $ 1,081,080 9/29/95 1,081,080 1,081,080 1,062,702
11.5% Senior Subordinated Note due 2004 $ 945,945 9/29/95 895,706 916,100 926,742
8% Junior Subordinated Convertible
Note due 2004, convertible into
partnership points at $1,388.89 per point $ 108,108 9/29/95 108,108 108,108 166,465
Warrant, exercisable until 2006, to purchase
partnership points at $.01 per point (B) 39 pts. 9/29/95 50,261 50,261 78,034
- ------------------------------------------------------------------------------------------------------------------------------
3,345,965 3,366,359 3,431,797
-------------------------------------------
CAPITOL SPECIALTY PLASTICS, INC.
A producer of dessicant stripes used for packaging pharmaceutical products.
Common Stock (B) 109 shs. * 438 503 403
- ------------------------------------------------------------------------------------------------------------------------------
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 common stock at
$7.31 per share $ 1,500,000 3/31/94 1,420,050 1,500,000 1,459,350
- ------------------------------------------------------------------------------------------------------------------------------
CDNOW, INC. -- O.T.C.
A music entertainment company which uses the internet as a global platform for the promoting and merchandising
of music and related merchandise.
Warrant, exercisable until 2004, to purchase
common stock at $14.46 per share (B) 27,777 shs. 8/6/97 278 -- 278
- ------------------------------------------------------------------------------------------------------------------------------
CHAPARRAL RESOURCES, INC. -- O.T.C.
An international oil and gas exploration and production company.
Common Stock (B) 164 shs. 12/3/97 107 6,395 1,162
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*12/30/97 and 5/29/99
13
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal 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 $ 661,340 12/8/95 $ 661,340 $ 661,340 $ 650,163
10.75% Senior Secured Term Note due 2003 $ 813,918 12/8/95 822,342 813,918 775,582
12% Senior Subordinated Note due 2005 $ 800,575 12/8/95 803,858 767,968 709,469
Common Stock (B) 184,560 shs. 12/8/95 138,420 184,560 138,420
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 138,420 shs. 12/8/95 1,384 50,853 1,384
- -----------------------------------------------------------------------------------------------------------------------------
2,427,344 2,478,639 2,275,018
-----------------------------------------
CORVEST GROUP, INC.
A manufacturer and distributor of promotional products.
12% Senior Subordinated Note due 2007 $ 3,863,636 * 3,737,681 3,580,876 3,653,068
Common Stock (B) 56 shs. * 86,923 96,591 86,923
Limited Partnership Interests 19.13% int. * 2,173 289,773 217,330
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 183 shs. * 2 297,203 2
- -----------------------------------------------------------------------------------------------------------------------------
3,826,779 4,264,443 3,957,323
-----------------------------------------
D&K HEALTH CARE RESOURCES, INC. -- O.T.C.
A wholesale pharmaceutical distribution company.
Common Stock (B) 245,989shs. 12/29/87 810,732 810,732 3,417,727
- -----------------------------------------------------------------------------------------------------------------------------
DIRECTED ELECTRONICS, INC.
A designer and distributor of brand name automotive security systems, audio products and installation accessories.
12% Senior Subordinated Note due 2007 $ 3,355,267 12/22/99 3,315,004 2,941,892 3,321,715
8% Convertible Class B Subordinated
Promissory Note due 2008 $ 74,562 12/22/99 70,707 74,562 70,878
Class B common stock (B) 26,097 shs. 12/22/99 234,869 260,965 234,869
Limited Partnership Interests (B) 8.61% int. 12/22/99 4,697 521,930 469,737
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 45,255 shs. 12/22/99 453 413,816 452
- -----------------------------------------------------------------------------------------------------------------------------
3,625,730 4,213,165 4,097,651
-----------------------------------------
DIVERSCO, INC./DHI HOLDINGS, INC.
A contract provider of janitorial and equipment maintenance services and temporary production labor to industrial customers.
12% Senior Subordinated Note due 2006 $ 2,814,000 8/28/98 2,799,086 2,558,182 2,710,726
Membership Interests of MM/Lincap
Diversco Invstments Ltd., LLC (B) 734,090 int. 8/27/98 587,272 734,090 587,272
Warrants, exercisable until 2003 &
2006, to purchase common stock of
DHI Holdings, Inc. at $.01 per share (B) 3,627 shs. ** 36 403,427 16,715
- -----------------------------------------------------------------------------------------------------------------------------
3,386,394 3,695,699 3,314,713
-----------------------------------------
EAGLE PACIFIC INDUSTRIES, INC. -- O.T.C.
An extruder of small and medium diameter plastic pipe and tubing in the United States.
14% Senior Subordinated Note due 2007 $ 3,316,500 9/16/99 3,316,500 3,316,500 3,347,675
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 197,040 shs. 9/16/99 -- 1 751,905
- -----------------------------------------------------------------------------------------------------------------------------
3,316,500 3,316,501 4,099,580
-----------------------------------------
* 3/5/99 and 3/24/99
**10/24/96 and 8/28/98
</TABLE>
14
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control center systems.
Senior Secured Tranche A Floating Rate Note
due 2005 $ 1,280,000 3/2/98 $1,270,272 $ 1,280,000 $ 1,273,088
8.85% Senior Secured Tranche A Note due 2005 $ 1,280,000 3/2/98 1,192,192 1,280,000 1,187,840
11.75% Senior Secured Tranche B Note due 2006 $ 700,000 3/2/98 743,750 603,944 711,550
Common Stock (B) 26,906 shs. 2/11/98 75,600 94,880 75,904
Limited Partnership Interests of CM
Equity Partners (B) 126,445 int. 2/11/98 1,012 126,445 101,156
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 34,783 shs. 3/2/98 348 112,000 348
- ------------------------------------------------------------------------------------------------------------------------------
3,283,174 3,497,269 3,349,886
-----------------------------------------
EXAMINATION MANAGEMENT SERVICES, INC.
A national full-service evidence provider to the insurance industry and a provider of occupational health testing.
12% Senior Subordinated Note due 2007 $ 2,109,637 3/16/99 2,027,572 1,963,014 1,990,373
Limited Partnership Interests (B) 2,140,363 int. 3/1/99 1,926,327 2,140,363 1,926,327
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 77,233 shs. 3/16/99 77,233 175,803 77,233
- ------------------------------------------------------------------------------------------------------------------------------
4,031,132 4,279,180 3,993,933
-----------------------------------------
FASTENERS FOR RETAIL, INC.
A designer and marketer of low-cost fastners for point of purchase displays and signage in retail environments.
12.5% Senior Subordinated Note due 2007 $ 3,650,000 12/22/99 3,670,075 3,187,522 3,677,375
Class B common Stock (B) 600 shs. 12/22/99 480,000 600,000 480,000
Warrant, exercisable until 2007, to purchase
common stock at $.02 per share(B) 589 shs. 12/22/99 6 462,927 6
- ------------------------------------------------------------------------------------------------------------------------------
4,150,081 4,250,449 4,157,381
-----------------------------------------
FLEMING ACQUISITION CORPORATION
A supplier of high-quality, premium printed labels for distilled spirits, wine, food and household products.
Common Stock (B) 545 shs. 4/28/95 1,231,111 272,500 26,013
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 380 shs. 4/28/95 98,235 170,455 18,123
Incentive Warrant, exercisable until 2000,
to purchase common stock at $.01 per share(B) 19 shs. 4/28/95 3,339 2,273 915
- ------------------------------------------------------------------------------------------------------------------------------
1,332,685 445,228 45,051
-----------------------------------------
GOLDEN BEAR OIL SPECIALTIES
A manufacturer of asphalt and specialty lubricating and processing oils.
17% Senior Subordinated Note due 2005 $ 3,367,446 7/18/97 3,399,774 3,310,680 3,502,144
12% Preferred Stock 393 shs. 7/18/97 39,786 311,111 218,213
Common Stock (B) 20,800 shs. 7/18/97 86,738 77,840 208
Warrant, exercisable until 2005, to purchase
common stock at $.001 per share (B) 23,333 shs. 7/18/97 233 69,999 233
Warrant, exercisable until 2010, to purchase
common stock at $.001 per share (B) 17,111 shs. 7/18/97 171 -- 171
- ------------------------------------------------------------------------------------------------------------------------------
3,526,702 3,769,630 3,720,969
-----------------------------------------
GRAND LYON ENTERPRISES LLC
A manufacturer and marketer of Grand Lyon Bordeaux Ketchup.
Limited Liability Interests (B) 4.99% int. 5/15/98 220,347 220,347 --
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
HAMILTON FUNERAL SERVICES
The largest privately held owner and operator of funeral homes in the United States.
15% Senior Subordinated Note due 2007 $ 2,975,494 1/25/99 $2,859,153 $ 2,927,047 $ 2,763,044
Warrant, exercisable until 2007, to purchase
common stock at $1 per share (B) 338,280 shs. 1/25/99 3,383 48,447 3,383
- ------------------------------------------------------------------------------------------------------------------------------
2,862,536 2,975,494 2,766,427
-----------------------------------------
HARTZELL MANUFACTURING, INC./CMS HOLDING COMPANY
A provider of contract engineering, manufacturing, and assembly services for a variety of industrial manufacturing companies.
12.5% Senior Subordinated note due 2007 $ 2,626,300 * 2,659,129 2,372,475 2,554,865
Common Stock (B) 63,830 shs. * 540,618 801,438 601,078
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 30,022 shs. * 3,002 315,156 3,002
- ------------------------------------------------------------------------------------------------------------------------------
3,202,749 3,489,069 3,158,945
-----------------------------------------
HUDSON RIVER CAPITAL, LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series A Preferred Units (B) 100,000 uts. 7/21/94 887,304 533,868 950,000
- ------------------------------------------------------------------------------------------------------------------------------
HUSSEY SEATING COMPANY
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving
Note due 2003 $ 1,350,000 6/12/96 1,336,770 1,350,000 1,324,850
Senior Secured Floating Rate Note due 2003 $ 1,650,000 6/12/96 1,633,665 1,650,000 1,617,420
10% Senior Secured Note due 2003 $ 487,501 6/12/96 474,631 487,501 477,458
12% Subordinated Secured Note due 2006 $ 1,350,000 6/12/96 1,327,320 1,184,501 1,307,340
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 3,553 shs. 6/12/96 36 225,000 311,744
- ------------------------------------------------------------------------------------------------------------------------------
4,772,422 4,897,002 5,038,812
-----------------------------------------
JACKSON PRODUCTS, INC.
A manufacturer and distributer of a variety of industrial and highway safety products.
Common Stock (B) 434 shs. 8/16/95 43,426 43,426 178,220
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 1,999 shs. 8/16/95 199,735 199,735 820,365
- ------------------------------------------------------------------------------------------------------------------------------
243,161 243,161 998,585
-----------------------------------------
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 3,137,889 3,208,346
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 57,418 shs. 12/2/96 57,418 333,300 574
- ------------------------------------------------------------------------------------------------------------------------------
3,441,413 3,471,189 3,208,920
-----------------------------------------
LATIN COMMUNICATIONS GROUP
An operator of Spanish-language media in North America.
5% Subordinated Note due 2005 $ 46,594 2/4/98 32,616 35,405 32,616
Common Stock (B) 98,586 shs. ** 701,116 826,484 924,245
- ------------------------------------------------------------------------------------------------------------------------------
733,732 861,889 956,861
* 4/18/97 and 10/7/98
** 2/14/95, 12/1/95, 2/27/96 and 2/4/98
</TABLE>
16
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
LIH INVESTORS, L.P.
A Manufacturer and marketer of a broad line of external accessories for new and used sport utility vehicles, trucks and vans.
12.5% Senior Subordinated Note due 2006 $ 3,845,000 * $3,345,150 $ 3,279,085 $ 3,388,983
Common Stock (B) 58,001 shs. * 406,007 406,003 324,806
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 108,404 shs. * 541,241 602,127 1,084
- ------------------------------------------------------------------------------------------------------------------------------
4,292,398 4,287,215 3,714,873
-----------------------------------------
LOUIS DREYFUS NATURAL GAS CORPORATION -- A.S.E.
An independent oil and gas company engaged principally in the acquisition, development and management of oil and gas properties.
Warrant, exercisable until 2004, to purchase
common stock at $17.81 per share (B) 103,342 shs. 12/27/91 49,714 38,712 197,682
- ------------------------------------------------------------------------------------------------------------------------------
MAGNETIC DATA TECHNOLOGIES, INC./MDT HOLDINGS LLC
A provider of post-sales services to electronic component manufacturers.
12% Senior Subordinated Note due 2007 $ 2,700,000 4/9/99 2,635,470 2,124,760 2,160,000
Limited Partnership Interest of MDT Holdings
LLC (B) 3.90% int. 4/9/99 9,896 1,099,500 549,750
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 665,776 shs. 4/9/99 6,658 603,257 6,658
- ------------------------------------------------------------------------------------------------------------------------------
2,652,024 3,827,517 2,716,408
-----------------------------------------
MAXTEC INTERNATIONAL CORP.
A manufacturer and distributor of remote control operating systems for overhead cranes.
Senior Floating Rate Revolving Credit
Facility due 2001 $ 461,536 6/28/95 461,536 461,536 461,536
Common Stock (B) 76,923 shs. 6/28/95 192,115 230,769 328,846
Warrant, exercisable from 1998 until 2005, to
purchase common stock at $.01 per share (B) 39,563 shs. 6/28/95 98,581 171,429 168,776
- ------------------------------------------------------------------------------------------------------------------------------
752,232 863,734 959,158
-----------------------------------------
MERCURY COMPUTER SYSTEMS, INC. -- O.T.C.
A designer and marketer of high performance computer systems for computationaly intense scientific and engineering applications.
Common Stock (B) 72,088 shs. 12/21/87 197,776 108,132 2,396,926
- ------------------------------------------------------------------------------------------------------------------------------
MERIT INDUSTRIES, INC.
A designer and manufacturer of coin-operated video and dart games.
12% Senior Subordinated Note due 2006 $ 2,516,293 8/19/98 2,469,238 2,351,705 1,887,220
Limited Partnership Interest of
Riverside X Holding Company L.P. (B) 7.51% int. ** 997,610 1,108,457 554,229
Warrant, exercisable until 2006, to purchase
limited partnership interests at $.01 per share (B)1,855 int. 8/19/98 19 185,411 18
- ------------------------------------------------------------------------------------------------------------------------------
3,466,867 3,645,573 2,441,467
-----------------------------------------
NEXELL THERAPEUTICS
A provider of cell therapy technology to the medical community.
Series B Convertible Preferred Stock 3,875 shs. 11/24/99 378,556 3,875,000 3,766,500
Warrant, exercisable until 2008, to purchase
common stock at $3 per share (B) 184,525 shs. 11/24/99 1,845 -- 1,845
- ------------------------------------------------------------------------------------------------------------------------------
380,401 3,875,000 3,768,345
-----------------------------------------
*12/23/98 and 1/28/99
**8/12/98 and 8/11/99
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
NPC, INC.
A manufacturer of flexible connectors and equipment used in the installation of sewers and storm drain pipelines.
Senior Secured Floating Rate Revolving Note
due 2006 $ 106,780 6/25/99 $ 106,780 $ 106,780 $ 106,780
Senior Secured Floating Rate Note due 2006 $ 3,327,966 6/25/99 3,327,966 3,327,966 3,302,673
12% Senior Secured Tranche B Note due 2007 $ 978,814 6/25/99 836,440 841,427 947,198
Limited Partnership Interest of Riverside XIII
Holding Company L.P. 4.45% int. 6/11/99 339,692 339,692 271,754
Warrant, exercisable until 2007, to purchase
common stock at $.01 per unit (B) 201 shs. 6/25/99 142,373 142,373 2
- -----------------------------------------------------------------------------------------------------------------------
4,753,251 4,758,238 4,628,407
-------------------------------------
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 common stock
at $9 per share $ 1,270,371 8/31/94 1,283,075 1,270,371 1,865,540
- -----------------------------------------------------------------------------------------------------------------------
OLYMPIC BOAT CENTERS, INC.
An operator of boat dealerships in Washington state, Wisconsin, Minnesota, and British Columbia.
12% Senior Subordinated Note due 2006 $ 2,774,000 8/7/98 2,764,568 2,464,374 2,644,177
Limited Partnership Interest of Riverside VIII
Holding Company L.P. (B) 9.87% int. * 909,951 1,011,056 909,951
Warrant, exercisable until 2007, to purchase
common stock at $.01 per interest (B) 25,793 int. 8/7/98 258 350,400 31,106
- -----------------------------------------------------------------------------------------------------------------------
3,674,777 3,825,830 3,585,234
-------------------------------------
PAR ACQUISITION CORP.
A manufacturer of fuel handling systems for nuclear power plants and hazardous waste.
14.5% Senior Subordinated Note due 2000 $ 4,166 2/5/93 4,160 4,166 4,166
8% Convertible Preferred Stock due 2001,
convertible into common stock at $2 per share 83,333 shs. 2/5/93 166,667 166,667 183,333
Common Stock (B) 133,333 shs. 2/5/93 333,333 333,333 293,333
- -----------------------------------------------------------------------------------------------------------------------
504,160 504,166 480,832
-------------------------------------
PEPSIAMERICAS, INC. -- N.Y.S.E.
A Pepsi soft drink bottler.
Common Stock (B) 332,296 shs. 3/8/88 181,486 2,006,380 996,888
- -----------------------------------------------------------------------------------------------------------------------
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 $ 587,411 11/30/95 612,141 587,411 595,869
10.5% Senior Secured Convertible Note
due 2005, convertible into common stock
at $50,000 per share $ 195,000 11/30/95 205,335 195,000 210,600
Common Stock 6 shs. 11/30/95 227,812 337,500 212,472
- -----------------------------------------------------------------------------------------------------------------------
1,045,288 1,119,911 1,018,941
-------------------------------------
</TABLE>
*8/7/98 and 2/23/99
18
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
PIPING SUPPLY HOLDINGS, INC.
A distributor of industrial pipes, valves and fittings.
12.5% Senior Subordinated Note due 2007 $ 3,463,000 12/14/99 $3,490,704 $ 3,002,761 $ 3,482,046
Class B common stock (B) 664 shs. 12/14/99 597,780 664,200 597,780
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 565 shs. 12/14/99 6 461,733 6
- -----------------------------------------------------------------------------------------------------------------------
4,088,490 4,128,694 4,079,832
-------------------------------------
PLAYCORE, INC -- 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 2,599,135 3,072,500
Limited Partnership Interest of Green
Grass Capital II, LLC (B) 5.97% int. 3/13/97 293,573 433,929 530,062
Warrant, exercisable until 2005, to purchase
limited partnership interest of Green Grass
Capital II LLC at $.01 per unit (B) 148,044 uts. 3/13/97 531,774 680,722 961,102
- -----------------------------------------------------------------------------------------------------------------------
3,410,347 3,713,786 4,563,664
-------------------------------------
PRECISION DYNAMICS, INC.
A manufacturer of custom-designed solenoid valves and controls.
Senior Secured Floating Rate Revolving Credit
Facility due 2003 $ 815,000 7/22/96 806,932 815,000 758,682
Senior Secured Floating Rate Term Note due 2003 $ 2,510,200 7/22/96 2,485,600 2,510,200 2,369,127
12% Senior Secured Term Note due 2004 $ 489,000 7/22/96 482,545 420,853 453,303
8% Preferred Stock 283 shs. 7/22/96 269,268 231,873 172,785
Common Stock (B) 599 shs. 7/22/96 21,699 28,978 14,211
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 322 shs. 7/22/96 3 97,800 7,648
- -----------------------------------------------------------------------------------------------------------------------
4,066,047 4,104,704 3,775,756
-------------------------------------
PROCESS CHEMICALS, LLC
A speciality chemical company that manufactures process chemicals for the fertilizer, asphalt and concrete industries.
6% Redeemable Preferred Membership Interests 2,525 int. * 248,410 2,615,375 2,500,821
Common Membership Interests 9,863 int. * 24,855 13,049 237,114
- -----------------------------------------------------------------------------------------------------------------------
273,265 2,628,424 2,737,935
-------------------------------------
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 $ 650,000 8/12/94 641,420 650,000 390,000
9.8% Redeemable Exchangeable Preferred Stock 8,000 shs. 8/12/94 678,320 800,000 160,000
Common Stock (B) 1,492 shs. 8/12/94 15 -- 112
- -----------------------------------------------------------------------------------------------------------------------
1,319,755 1,450,000 550,112
-------------------------------------
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 1,540,350
Common Stock (B) 35,500 shs. 2/16/93 340,800 340,800 602,832
- -----------------------------------------------------------------------------------------------------------------------
1,939,950 1,840,800 2,143,182
-------------------------------------
RENT-WAY, INC. -- O.T.C.
An operator rent-to-own stores across the United States.
Warrant, exercisable until 2002, to
purchase common stock at $9.94 per share (B) 20,000 shs. 7/18/95 200 -- 174,274
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
*7/31/97 and 1/4/99
19
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
SAFETY SPEED CUT MANUFACTURING
A manufacturer of vertical panel saws and routers for the wood working industry.
12% Senior Secured Tranche A Note due 2007 $ 3,391,956 6/2/99 $3,391,956 $ 3,391,956 $ 3,371,943
12% Senior Secured Tranche B Note due 2007 $ 1,130,652 6/2/99 1,130,652 1,130,652 1,082,938
Class B common stock (B) 1,480 shs. 6/2/99 256,212 256,212 204,969
- -----------------------------------------------------------------------------------------------------------------------
4,778,820 4,778,820 4,659,850
-------------------------------------
SHARP INTERNATIONAL CORP.
A designer and distributer of wrist watches, clocks, pens and mechanical pencils.
11% Subordinated Debenture due 2006 $ 2,200,000 7/10/98 2,108,260 2,169,829 220,000
11% Subordinated Debenture due 2008 $ 2,050,000 3/26/99 2,026,630 2,018,430 205,000
Warrants, exercisable until 2006 and 2008, to
purchase common stock at $.01 per share (B) 75,579 shs. * 755 61,741 --
- -----------------------------------------------------------------------------------------------------------------------
4,135,645 4,250,000 425,000
-------------------------------------
SNYDER INDUSTRIES, INC.
A manufacturer of proprietary rotationally molded polyethylene containers.
12.5% Senior Subordinated Note due 2007 $ 3,125,000 12/6/99 3,036,875 2,700,727 3,025,312
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 513 shs. 12/6/99 5 426,136 5
- -----------------------------------------------------------------------------------------------------------------------
3,036,880 3,126,863 3,025,317
-------------------------------------
STAR INTERNATIONAL, INC.
A manufacturer of commercial cooking appliances.
9.65% Senior Secured Note due 2004 $ 1,173,134 5/27/94 1,173,134 1,173,134 1,161,990
10.5% Subordinated Note due 2004 $ 716,418 5/27/94 716,418 716,418 692,561
Common Stock (B) 4,310 shs. 5/27/94 259,735 259,735 264,110
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 3,224 shs. 5/27/94 32 -- 197,526
- -----------------------------------------------------------------------------------------------------------------------
2,149,319 2,149,287 2,316,187
-------------------------------------
SUPREME INDUSTRIES, IN C . -- A.S.E.
A manufacturer of modular homes and truck bodies.
Common Stock (B) 100,203 ** 229,194 267,353 558,008
Common Stock of TGC Industries, Inc. (B) 6,361 shs. 9/30/86 3,166 9,497 4,770
- -----------------------------------------------------------------------------------------------------------------------
232,360 276,850 562,778
-------------------------------------
THE TRANZONIC COMPANIES
A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel,
washroom and restroom supplies and sanitary care products.
12.5% Senior Subordinated Note due 2006 $ 2,712,000 2/5/98 2,762,172 2,384,203 2,738,577
Common Stock (B) 630 shs. 2/5/98 567,000 630,000 567,000
Warrants to purchase shares of Class B
common stock at .01 per share (B) 444 shs. 2/5/98 4 368,832 65,247
- -----------------------------------------------------------------------------------------------------------------------
3,329,176 3,383,035 3,370,824
-------------------------------------
TIDEWATER HOLDINGS, INC.
An operator of a barge transportation line on the Columbia/Snake River system.
Convertible Preferred Stock, convertible into
common stock at $1,000 per share (B) 1,120 shs. 7/25/96 1,008,000 1,120,000 1,167,869
Warrant, exercisable until 2008,
to purchase common stock at $.01 per share (B) 474 shs. 7/25/96 43 48,216 494,004
- -----------------------------------------------------------------------------------------------------------------------
1,008,043 1,168,216 1,661,873
-------------------------------------
</TABLE>
*7/10/98 and 3/26/99
**5/23/79, 12/15/95 and 6/9/96
20
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
TRANSMONTAIGNE OIL COMPANY -- A.S.E.
An independent petroleum products marketing company.
12.75% Senior Subordinated Debenture due 2000 $ 600,000 3/28/91 $ 637,140 $ 591,854 $ 618,720
Common Stock (B) 258,720 shs. * 400,000 798,595 1,539,384
Warrant, exercisable until 2001, to purchase
common stock at $3.60 per share (B) 74,606 shs. 3/28/91 7,461 42,000 215,611
- -----------------------------------------------------------------------------------------------------------------------
1,044,601 1,432,449 2,373,715
-------------------------------------
TREND TECHNOLOGIES, 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 2,279,493
10% Junior Subordinated Note Due 2000 $ 432,574 11/30/99 432,574 432,574 413,498
Limited Partnership Interest of
Riverside V Holding Company L.P. 8.28% int. ** 702,561 775,845 620,656
Limited Partnership Interest of
Riverside V-A Holding Company L.P. 8.28% int. ** 1,591,050 1,668,297 1,251,275
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 3,131 uts. 3/21/97 3,131 3,131 313
- -----------------------------------------------------------------------------------------------------------------------
5,321,991 5,390,218 4,565,235
-------------------------------------
TRIDEX CORP. -- O.T.C.
A designer and manufacturer of point-of-sale monitors and keyboards used by retailers and restaurants.
12% Senior Subordinated Note due 2005 $ 3,000,000 4/17/98 30,000 3,000,000 600,000
Common Stock (B) 71,429 shs. 4/17/98 500,003 500,003 58,036
Warrant, exercisable until 2005, to purchase
common stock at $2.03 per share (B) 218,182 shs. 5/26/98 -- 1 2,182
- -----------------------------------------------------------------------------------------------------------------------
530,003 3,500,004 660,218
-------------------------------------
TRUSEAL TECHNOLOGIES, INC.
A manufacturer of sealant systems for the North American window and door market.
12.25% Senior Subordinated Note due 2006 $ 2,675,000 6/23/97 2,733,315 2,369,607 2,607,055
Limited Partnership Interests (B) 10.04% int. 6/17/97 742,140 824,600 742,140
Warrant, exercisable until 2006, to purchase
limited partnership interests at $.01 per unit (B) 1,258 uts. 6/23/97 13 376,932 13
- -----------------------------------------------------------------------------------------------------------------------
3,475,468 3,571,139 3,349,208
-------------------------------------
U.S. NETTING, INC.
A manufacturer of plastic netting for a wide variety of industries.
11% Senior Secured Note due 2005 $ 1,257,523 5/3/95 1,390,569 1,257,523 753,633
12% Subordinated Note due 2005 $ 652,050 5/3/95 733,622 627,512 409,422
Common Stock (B) 4,911 shs. 5/3/95 162,652 391,230 4,911
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 2,795 shs. 5/3/95 92,549 35,923 28
- -----------------------------------------------------------------------------------------------------------------------
2,379,392 2,312,188 1,167,994
-------------------------------------
</TABLE>
*3/28/91, 12/18/91, 9/30/92, 9/30/93, 9/30/94, 3/31/95 and 5/9/95
**3/21/97, 10/16/97, 11/19/97 and 3/12/99
21
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares, Units,
Ownership, Fair Value at Fair Value
Corporate Restricted Securities: (A) Warrants or Acquisition Acquisition Cost at 12/31/99
(Continued) Principal Amount Date Date (Note 2B) (Note 2A)
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
UNIDIGITAL, INC.
A provider within the digital image and digital media services sector.
14% Senior Subordinated Note due 2006 $ 4,250,000 09/14/99 $4,037,500 $4,037,500 $4,148,000
Warrant, exercisable until 2006, to purchase
limited partnership interests at
$5.425 per unit (B) 146,654 shs. 09/14/99 1,467 212,500 1,466
- -----------------------------------------------------------------------------------------------------------------------
4,038,967 4,250,000 4,149,466
UNIPAC CORPORATION
A manufacturer of laminated materials which are used to seal a variety of packaging containers.
Limited Partnership Interest of Riverside II
Holding Company L.P. (B) 50,968 uts. * 46,715 50,968 --
- -----------------------------------------------------------------------------------------------------------------------
VICTORY VENTURES, LLC
An acquirer of controlling or substantial interests in other entities.
Series A Preferred Units (B) 11,270 uts. 12/2/96 12,701 27,415 22,540
- -----------------------------------------------------------------------------------------------------------------------
VITEX PACKAGING, INC.
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
Senior Secured Floating Rate Revolving Credit
Facility due 2003 $ 1,009,575 1/2/98 485,759 1,009,575 1,004,325
Senior Secured Floating Rate Tranche A
Note due 2005 $ 2,058,000 1/2/98 2,041,742 2,058,000 2,045,446
12% Senior Secured Tranche B Note due 2007 $ 672,000 1/2/98 678,787 621,600 648,278
Senior Secured Floating Rate Tranch C
Note due 2006 $ 680,000 9/17/99 670,286 670,286 680,000
Limited Partnership Interest of Riverside VI
Holding Company L.P. 4.80% int. ** 2,810 351,216 280,973
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 118 shs. 1/2/98 1 60,117 1
- -----------------------------------------------------------------------------------------------------------------------
3,879,385 4,770,794 4,659,023
--------------------------------------
Total Private Placement Investments $165,035,312 184,712,687 164,640,025
============--------------------------
</TABLE>
*2/9/96 and 9/25/96
**12/30/97 and 9/9/99
22
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Corporate Restricted Securities: (A) Shares or Market Value
(Continued) Interest Due Principal Cost at 12/31/99
Rule 144A Securities -- 5.00%: (A) Rate Date Amount (Note 2B) (Note 2A)
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
BONDS -- 2.11%
Atlantic Coast Airlines Inc. 8.750% 01/01/07 $ 522,930 $ 522,930 $ 480,912
Climachem, Inc. 10.750 12/01/07 175,000 168,000 43,750
Cuddy International Corp. 10.750 12/01/07 525,000 517,156 315,000
Tjiwi Kima Fin Mauritius LTD 10.000 08/01/04 2,000,000 1,060,000 1,435,000
Von Hoffman Press, Inc. 10.375 05/15/06 850,000 851,112 833,000
Winslow Escrow Corporation 12.750 08/15/07 900,000 878,661 878,148
- --------------------------------------------------------------------------------------------------------------------------------
Total Bonds $ 4,972,930 3,997,859 3,985,810
============------------------------------------
CONVERTIBLE BONDS -- 2.27%
Arbor Software Corporation 4.500 03/15/05 $ 200,000 200,000 189,000
Commscope, Inc. 4.000 12/15/06 250,000 250,000 267,765
Echostar Communications, Inc. 4.875 01/01/07 1,000,000 1,000,000 1,218,630
General Semiconductor, Inc. 5.750 12/15/06 770,000 770,000 812,350
I2 Technologies, Inc. 5.250 12/15/06 650,000 650,000 930,313
Liberty Media 4.000 11/15/29 700,000 700,000 864,500
- --------------------------------------------------------------------------------------------------------------------------------
Total Convertible Bonds $ 3,570,000 3,570,000 4,282,558
============------------------------------------
CONVERTIBLE PREFERRED STOCK -- 0.58%
D T Industries, Inc. 40,000 2,000,000 1,000,000
Jordan Telecom Products 91 72,803 98,269
- --------------------------------------------------------------------------------------------------------------------------------
Total Convertible Preferred Stock 2,072,803 1,098,269
---------------------------
COMMON STOCK -- 0.01%
Jordan Telecom Products (B) 70 14,000 21,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Common Stock 14,000 21,000
---------------------------
WARRANTS -- 0.03%
Decrane Aircraft (B) 70 1 1
Energy Conversion Devices Inc. (B) 30,116 -- 56,468
Winsloew Escrow Corporation (B) 900 9 9
- --------------------------------------------------------------------------------------------------------------------------------
Total Warrants 10 56,478
---------------------------
Total Rule 144A Securities 9,654,672 9,444,115
- --------------------------------------------------------------------------------------------------------------------------------
Total Corporate Restricted Securities 194,367,359 174,084,140
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares or Market Value
Interest Due Principal Cost at 12/31/99
Corporate Public Securities -- 19.80%: (A) Rate Date Amount (Note 2B) (Note 2A)
================================================================================================================================
<S> <C> <C> <C> <C> <C>
BONDS -- 7.46%
Cabot Safety Corporation 12.500% 07/15/05 $ 1,000,000 $ 1,000,000 $ 1,020,000
Canadian Airlines Corporation 10.000 05/01/05 455,000 456,000 359,450
DeCrane Aircraft 12.000 09/30/08 700,000 699,999 644,000
Derby Cycle Corp. 10.000 05/15/08 460,000 460,000 257,600
Doe Run Resources Corp. 11.250 03/15/05 460,000 440,000 431,250
Doe Run Resources Corp. 12.231 03/15/03 160,000 135,600 150,400
E V Internation, Inc. 11.000 03/15/07 1,000,000 600,000 620,000
GFSI Inc. 9.625 03/01/07 145,000 119,994 89,900
Grove Worldwide 9.250 05/01/08 335,000 292,325 100,500
Haynes International, Inc. 11.625 09/01/04 640,000 577,000 555,200
Jordan Industries, Inc. 10.375 08/01/07 500,000 500,000 500,000
Jordan Telecom Products 9.875 08/01/07 1,750,000 1,712,907 1,890,000
Jordan Telecom Products 0.000 08/01/07 675,000 577,125 729,000
JTM Industries / ISG Resources, Inc. 10.000 04/15/08 300,000 300,000 255,000
Kevco, Inc. 10.375 12/01/07 275,000 151,250 68,750
M J D Communications, Inc. 9.500 05/01/08 100,000 100,000 94,500
M J D Communications, Inc. 10.321 05/01/08 250,000 250,000 233,970
MCMS, Inc 9.750 03/01/08 600,000 600,000 300,000
Morris Materials Handling 9.500 04/01/08 300,000 300,000 99,000
MSX International, Inc 11.375 01/15/08 500,000 490,250 477,500
Neff Corp 10.250 06/01/08 230,000 227,688 220,800
Numatics, Inc 9.625 04/01/08 820,000 790,175 615,000
Pillotex Corporation 10.000 11/15/06 100,000 103,000 46,000
Quality Stores, Inc 10.625 04/01/07 600,000 586,500 552,000
Remington Products Company 11.000 05/15/06 600,000 595,506 462,000
Therma-Wave, Inc. 10.625 05/15/04 710,000 652,500 731,300
Trans World Airlines 11.500 12/15/04 500,000 494,110 320,000
United Refining Company 10.750 06/15/07 1,365,000 1,365,000 846,300
W R Carpenter North America 10.625 06/15/07 625,000 631,917 356,250
Wavetek Corporation 10.125 06/15/07 130,000 130,000 106,762
WEC Co., Inc. 12.000 07/15/09 800,000 800,000 744,000
Worldtex, Inc. 9.625 12/15/07 270,000 270,000 218,700
- --------------------------------------------------------------------------------------------------------------------------------
Total Bonds $17,355,000 16,408,846 14,095,132
===========----------------------------------
COMMON STOCK -- 8.55%
Agency.com Inc. (B) 4,875 126,750 248,625
Agilent Technologies, Inc. (B) 16,575 497,250 1,281,463
Akami Technologies, Inc. (B) 3,250 84,500 1,064,781
American Country Holdings Inc. (B) 405,590 760,889 329,542
Associated Materials, Inc. 43,240 497,673 708,055
Benson Petroleum, LTD. (B) 200,000 154,408 172,260
BP Prudhoe Bay Royalty Trust (B) 26,180 356,595 237,256
Budget Group, Inc. (B) 95,456 1,996,621 865,070
Cacheflow, Inc. (B) 3,250 78,000 424,734
Caliper Technologies Corp. (B) 650 10,400 43,387
Career Blazers, Inc. (B) 105,000 577,500 945,000
Chartered Semiconductor -- ADR (B) 1,300 26,000 94,900
Cobalt Networks, Inc. (B) 813 17,886 88,109
Computer Horizons Corp. (B) 21,668 258,540 350,751
Data Return Corp. (B) 6,500 84,500 347,750
Deltathree.com, Inc. (B) 4,550 68,250 117,162
Digimarc Corp. (B) 650 13,000 32,500
Digital Impact, Inc. (B) 813 12,195 40,752
Dreamlife, Inc. (B) 40,625 452,156 652,539
E-Stamp Corp. (B) 9,750 165,750 216,937
</TABLE>
24
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Shares or Market Value
Corporate Public Securities Interest Due Principal Cost at 12/31/99
(Continued) Rate Date Amount (Note 2B) (Note 2A)
================================================================================================================================
<S> <C> <C> <C> <C> <C>
Epcos AG (B) 13,000 $ 433,347 $ 970,937
Expedia, Inc. -- Class A (B) 2,600 36,400 91,000
Finisar Corp. (B) 1,625 30,875 146,047
Florist Transworld Delivery, Inc. (B) 29,374 41,258 587,480
GetThere.com, Inc. (B) 3,250 52,000 130,812
Hosiery Corporation of America (B) 1,000 -- 40,250
iManage, Inc. (B) 650 7,150 20,881
Immersion Corp. (B) 1,625 19,500 62,359
Intertrust Technologies Corp. (B) 1,625 29,250 191,141
JNI Corp. (B) 3,250 61,750 214,500
Jupiter Communications, Inc. (B) 4,875 102,375 147,469
Korea Thrunet Co., Ltd. (B) 1,950 35,100 132,356
Maxygen Inc. (B) 1,950 31,200 138,450
McAfee.com Corp. (B) 1,625 19,500 73,125
Metalink Ltd. (B) 3,250 39,000 66,219
Metasolve Software, Inc. (B) 3,250 61,750 265,687
Next Level Communication, Inc. (B) 2,113 42,260 158,211
Official Payments Corp. (B) 3,250 48,750 169,000
OnDisplay, Inc. (B) 325 9,100 29,534
Pfsweb Inc. (B) 1,300 22,100 48,750
Quintus Corp. (B) 6,500 117,000 298,188
Rainmaker Systems, Inc. (B) 3,250 26,000 65,813
Rent-Way, Inc. (B) 120,725 1,200,008 2,256,109
SciQuest.com, Inc. (B) 1,625 26,000 129,188
Swiss Army Brands, Inc. (B) 39,000 393,825 277,875
Sycamore Networks, Inc. (B) 2,275 86,450 700,700
TeleCorp PCS, Inc. (B) 1,300 26,000 49,400
Terra Networks, S.A. (B) 3,250 43,583 177,938
Tritel, Inc. (B) 1,625 29,250 51,493
Triton PCS Holdings, Inc. -- Class A (B) 2,600 46,800 118,300
Xpedior Incorporated (B) 3,250 61,750 93,438
- -------------------------------------------------------------------------------------------------------------------------------
Total Common Stock 9,418,194 16,164,223
-----------------------------
CONVERTIBLE BONDS -- 3.37%
Advanced Energy 5.250% 11/15/06 $ 700,000 699,187 833,000
Arbor Software Corporation 4.500 03/15/05 50,000 35,500 47,250
Clear Channel Communications 1.500 12/01/02 1,000,000 1,000,000 1,024,560
Diamond Offshore Drilling 3.750 02/15/07 860,000 850,855 867,792
Kellstorm Industries, Inc. 5.500 06/15/03 975,000 833,150 646,854
Mindspring Enterprises, Inc 5.000 04/15/06 1,125,000 987,067 1,077,188
Network Associates, Inc. 0.000 02/13/18 2,950,000 996,714 1,127,372
STMicroelectronics NV 0.000 09/09/22 270,000 213,322 369,225
Tower Automotive, Inc. 5.000 08/01/04 450,000 407,250 370,480
- -------------------------------------------------------------------------------------------------------------------------------
Total Convertible Bonds $ 8,380,000 6,023,045 6,363,721
===========-----------------------------------
CONVERTIBLE PREFERRED STOCK -- .39%
Emmis Communications 6,825 341,250 542,588
PSINet Inc 3,365 168,250 195,591
- -------------------------------------------------------------------------------------------------------------------------------
Total Convertible Preferred Stock 509,500 738,179
-----------------------------
WARRANTS -- .03%
American Country Holdings Inc. (B) 183,117 45,779 57,224
- -------------------------------------------------------------------------------------------------------------------------------
Total Warrants 45,779 57,224
-----------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Total Corporate Public Securities 32,405,364 37,418,479
-----------------------------
</TABLE>
25
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Corporate Public Securities: (A) Market Value
(Continued) Interest Due Principal Cost at 12/31/99
Short-Term Securities Rate/Yield Date Amount (Note 2B) (Note 2A)
============================================================================================================================
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- 7.45%
American Electric Power Company, Inc. 6.461 01/18/00 $ 3,700,000 $ 3,688,905 $ 3,688,902
Case Credit Corporation 7.030 01/01/00 1,560,000 1,557,309 1,557,303
Conagra, Inc. 6.659 01/05/00 2,270,000 2,268,351 2,268,277
Country Wide Home Loans, Inc. 5.328 01/07/00 495,000 494,567 494,499
Indiana Michigan Power Company 7.270 01/11/00 2,855,000 2,849,330 2,849,328
Public Service Electric and Gas Company 6.631 01/12/00 3,240,000 3,233,565 3,233,540
- ----------------------------------------------------------------------------------------------------------------------------
Total Short-Term Securities $ 14,120,000 14,092,027 14,091,849
=============--------------------------------------
Total Investments 119.38% $ 240,864,750 225,594,468
=============-------------------
Other Assets 2.17 4,094,569
Liabilities (21.55) (40,728,277)
- ----------------------------------------------------------------------------------------------------------------------------
Total Net Assets 100.00% 188,960,760
============================================================================================================================
</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.
See notes to financial statements.
Fair Value
at 12/31/99
Corporate Restricted Securities (Note 2A)
======================================================================
AEROSPACE & DEFENSE -- .00%
DeCrane Aircraft $ 1
- ----------------------------------------------------------------------
1
------------
AUTOMOBILE -- 3.80%
America's Body Co./LCP Holding Co. 3,456,601
LIH Investors, L.P. 3,714,873
- ----------------------------------------------------------------------
7,171,474
------------
BEVERAGE, FOOD & TOBACCO -- 3.72%
Associated Vintage Group, Inc. 166,750
Beta Brands, Inc. 2,428,165
Cains Foods, L.P. 3,431,797
Grand Lyon Enterprises --
PepsiAmericas, Inc. 996,888
- ----------------------------------------------------------------------
7,023,600
------------
BROAD CASTING & ENTERTAINMENT -- 1.61%
Echostar Communications, Inc. 1,218,630
Latin Communications Group 956,861
Liberty Media 864,500
- ----------------------------------------------------------------------
3,039,991
------------
BUILDINGS & REAL ESTATE -- 2.07%
Supreme Industries, Inc. 562,778
Truseal Technologies, Inc. 3,349,208
- ----------------------------------------------------------------------
3,911,986
------------
CARGO TRANSPORT -- 2.01%
RailTex, Inc. $ 2,143,182
Tidewater Holdings, Inc. 1,661,873
- ----------------------------------------------------------------------
3,805,055
------------
CHEMICAL, PLASTICS & RUBBER -- 4.58%
AccTech, LLC 182,206
Process Chemicals, LLC 2,737,935
Trend Technologies, Inc. 4,565,235
U.S. Netting, Inc. 1,167,994
- ----------------------------------------------------------------------
8,653,370
------------
CONSUMER PRODUCTS -- 5.66%
Alpha Shirt Company 4,035,561
Consumer Product Enterprises, Inc. 2,275,018
Corvest Group, Inc. 3,957,323
Sharp International Corp. 425,000
- ----------------------------------------------------------------------
10,692,902
------------
CONTAINERS, PACKAGING & GLASS -- 4.63%
C & K Manufacturing and Sales Company 1,023,184
Capitol Specialty Plastics, Inc. 403
Fleming Acquisition Corporation 45,051
Snyder Industries, Inc. 3,025,317
Unipac Corporation --
Vitex Packaging, Inc. 4,659,023
- ----------------------------------------------------------------------
8,752,978
------------
26
<PAGE>
- --------------------------------------------------------------------------------
CONSOLIDATED SCHEDULE OF INVESTMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
Fair Value
at 12/31/99
Corporate Restricted Securities (Continued) (Note 2A)
============================================================================
DIVERSIFIED/CONGLOMERATE, MANUFACTURING -- 19.17%
Commscope, Inc. $ 267,765
D T Industries, Inc. 1,000,000
Eagle Pacific Industries, Inc. 4,099,580
Energy Conversion Devices Inc. 56,468
Evans Consoles, Inc. 3,349,886
Hartzell Manufacturing, Inc./
CMS Holding Company 3,158,945
Hudson River Capital, LLC 950,000
Hussey Seating Company 5,038,812
Jackson Products, Inc. 998,585
Kappler Safety Group, Inc. 3,208,920
Maxtec International Corp. 959,158
NPC, Inc. 4,628,407
PAR Acquisition Corp. 480,832
Safety Speed Cut Manufacturing 4,659,850
The Tranzonic Companies 3,370,824
- ----------------------------------------------------------------------------
36,228,032
-------------
DIVERSIFIED/CONGLOMERATE, SERVICE -- 7.31%
Diversco, Inc./DHI Holdings, Inc. 3,314,713
Examination Management Services, Inc. 3,993,933
Hamilton Funeral Services 2,766,427
Magnetic Data Technologies, Inc./
MDT Holdings LLC 2,716,408
Pharmaceutical Buyers, Inc. 1,018,941
- ----------------------------------------------------------------------------
13,810,422
-------------
ELECTRONICS -- 10.62%
Arbor Software Corporation 189,000
Averstar, Inc. 1,183,965
Directed Electronics, Inc. 4,097,651
General Semiconductor, Inc. 812,350
I2 Technologies, Inc. 930,313
Mercury Computer Systems, Inc. 2,396,926
Nu Horizons Electronics Corp. 1,865,540
Precision Dynamics, Inc. 3,775,756
Tridex Corp. 660,218
Unidigital, Inc. 4,149,466
- ----------------------------------------------------------------------------
20,061,185
-------------
FARMING & AGRICULTURE -- .46%
Cuddy International Corp. 315,000
Protein Genetics, Inc. 550,112
- ----------------------------------------------------------------------------
865,112
-------------
HEALTH CARE, EDUCATION & CHILDCARE -- 3.80%
D&K Healthcare Resources, Inc. 3,417,727
Nexell Therapeutics 3,768,345
- ----------------------------------------------------------------------------
7,186,072
-------------
HOME & OFFICE FURNISHINGS, HOUSEWARES,
AND DURABLE CONSUMER PRODUCTS -- 4.20%
Catalina Lighting, Inc. 1,459,350
Fasteners for Retail, Inc. 4,157,381
Star International Holdings, Inc. 2,316,187
- ----------------------------------------------------------------------------
7,932,918
-------------
LEISURE, AMUSEMENT, ENTERTAINMENT -- 6.63%
Adventure Entertainment Corporation 1,942,438
CDnow, Inc. 278
Merit Industries, Inc. 2,441,467
Olympic Boat Centers, Inc. 3,585,234
Playcore, Inc 4,563,664
- ----------------------------------------------------------------------------
12,533,081
-------------
MINING, STEEL, IRON & NON-PRECIOUS
METALS -- 1.25%
Better Minerals & Aggregates 2,368,867
- ----------------------------------------------------------------------------
2,368,867
-------------
MISCELLANEOUS -- 3.42%
Climachem, Inc. 43,750
Piping Supply Holdings, Inc. 4,079,832
Tjiwi Kima Fin Mauritius LTD 1,435,000
Victory Ventures, LLC 22,540
Winslow Escrow Corporation 878,157
- ----------------------------------------------------------------------------
6,459,279
-------------
OIL AND GAS -- 3.98%
Applied Process Solutions, Inc. 1,219,894
Chaparral Resources, Inc. 1,162
Golden Bear Oil Specialties 3,720,969
Louis Dreyfus Natural Gas Corporation 197,682
TransMontaigne Oil Company 2,373,715
- ----------------------------------------------------------------------------
7,513,422
-------------
PERSONAL TRANSPORTATION -- .25%
Atlantic Coast Airlines Inc. 480,912
- ----------------------------------------------------------------------------
480,912
-------------
PRINTING & PUBLISHING -- .44%
Von Hoffman Press, Inc. 833,000
- ----------------------------------------------------------------------------
833,000
-------------
RETAIL STORES -- 2.46%
A T I Acquisition Corporation 4,466,938
Rent-Way, Inc. 174,274
- ----------------------------------------------------------------------------
4,641,212
-------------
TELECOMMUNICATIONS -- .06%
Jordan Telecom Products 119,269
- ----------------------------------------------------------------------------
119,269
-------------
Total Corporate Restricted
Securities -- 92.13% $174,084,140
- ----------------------------------------------------------------------------
27
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
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 under
the laws of the Commonwealth of Massachusetts, effective November 28, 1985.
On January 27,1998, the Board of Trustees authorized the formation of a totally
held subsidiary ("MMCI Subsidiary Trust") for the purpose of holding certain
investments. The results of MMCI Subsidiary Trust have been consolidated in the
accompanying financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Valuation of Investments:
Valuation of a security in the Trust's portfolio is made on the basis of market
price whenever market quotations are readily available and all securities of the
same class held by the Trust can be readily sold in such market.
Nearly all securities which are acquired by the Trust directly from the issuers
and shares into which such securities may be converted or which may be purchased
on the exercise of warrants attached to such securities will be subject to legal
or contractual delays in or restrictions on resale and will therefore be
"restricted securities". Generally speaking, as contrasted with open-market
sales of unrestricted securities which may be effected immediately if the market
is adequate, restricted securities can be sold only in a directly negotiated
transaction to a limited number of purchasers or in a public offering for which
a registration statement is in effect under the Securities Act of 1933.
The value of restricted securities, and of any other assets for which there are
no reliable market quotations, is the fair value as determined in good faith by
the Board of Trustees of the Trust (the "Trustees"). Each restricted security is
valued by the Trustees at the time of the acquisition thereof and at least
quarterly thereafter. The Trustees have established guidelines to aid in the
valuation of each security. Generally, restricted securities are initially
valued at cost or less at the time of acquisition by the Trust. Values greater
or less than cost are used thereafter for restricted securities in appropriate
circumstances. Among the factors ordinarily considered are the existence of
restrictions upon the sale of the security by the Trust; an estimate of the
existence and extent of a market for the security; the extent of any discount at
which the security was acquired; the estimated period of time during which the
security will not be freely marketable; the estimated expenses of registering or
otherwise qualifying the security for public sale; estimated underwriting
commissions if underwriting would be required to effect a sale; in the case of a
convertible security, whether or not it would trade on the basis of its stock
equivalent; in the case of a debt obligation which would trade independently of
any equity equivalent, the current yields on comparable securities; the
estimated amount of the floating supply of such securities available; the
proportion of the issue held by the Trust; changes in the financial condition
and prospects of the issuer; the existence of merger proposals or tender offers
affecting the issuer; and any other factors affecting fair value, all in
accordance with the Investment Company Act of 1940. In making valuations,
opinions of counsel may be relied upon as to whether or not securities are
restricted securities and as to the legal requirements for public sale.
When market quotations are readily available for unrestricted securities of an
issuer, restricted securities of the same class are generally valued at a
discount from the market price of such unrestricted securities. The Trustees,
however, consider all factors in fixing any discount, including the filing of a
registration statement for such securities under the Securities Act of 1933 and
any other developments which are likely to increase the probability that the
securities may be publicly sold by the Trust without restriction.
The Board of Trustees of the Trust meets at least once in each quarter to value
the Trust's portfolio securities as of the close of business on the last
business day of the preceding quarter. This valuation requires the approval of a
majority of the Trustees of the Trust, including a majority of the Trustees who
are not interested persons of the Trust (otherwise than as Trustees) or of
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 $174,084,140
(92.13% of net assets) as of December 31, 1999 ($166,668,053 at December 31,
1998) whose values have been estimated by the Board of Trustees in the absence
of readily ascertainable market values. Due to the inherent uncertainty of
valuation, those estimated values may differ significantly from the values that
would have been used had a ready market for the securities existed, and the
differences could be material.
The values for corporate public securities are stated at the last reported sales
price or at prices based upon quotations obtained from brokers and dealers as of
December 31, 1999, subject to discount where appropriate, and are approved by
the Trustees.
Short-term securities with more than sixty days to maturity are valued at fair
value and short-term securities having a maturity of sixty days or less are
valued at amortized cost which approximates market value.
28
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
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 and 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 all or a portion of such net gains.
In 1999, the fund reclassed $354,832 from Undistributed net income to Retained
net realized gain on investments to more accurately portray the fund's financial
position. This reclass has no impact on the fund's net asset value per share.
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,
safekeeping facilities, 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 year ended December 31, 1999 was:
PERFORMANCE
ADJUSTMENT AMOUNT
- ----------------------------------------------------------
March 31, 1999 (0.0625%) (125,580)
June 30, 1999 (0.0625%) (104,811)
September 30, 1999 (0.0625%) (128,042)
December 31, 1999 (0.0625%) (127,963)
- ----------------------------------------------------------
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.
29
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
5. PURCHASES AND SALES OF INVESTMENTS
For the year For the year
ended 12/31/99 ended 12/31/98
- -------------------------------------------------------------------------
Cost of Investments Acquired
- -------------------------------------------------------------------------
Corporate restricted securities $ 99,390,409 $ 84,022,395
Corporate public securities 46,963,001 44,579,636
Short-term securities 579,219,495 485,878,059
Proceeds from Sales or Maturities
- -------------------------------------------------------------------------
Corporate restricted securities $ 78,805,361 $ 92,673,578
Corporate public securities 76,316,355 57,741,300
Short-term securities 573,738,039 480,624,992
The aggregate cost of investments is the same for financial reporting and
federal income tax purposes as of December 31, 1999. The net unrealized
depreciation of investments for financial reporting and federal tax
purposes as of December 31, 1999 is $15,270,282 and consists of $27,442,696
appreciation and $42,712,978 depreciation.
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of December 31, 1998. The net unrealized
appreciation of investments for financial reporting and federal tax
purposes as of December 31, 1998 was $15,071,547 and consisted of
$40,735,293 appreciation and $25,663,746 depreciation.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED) Amount Per Share Amount Per Share
- ----------------------------------------------------------------------------------------------------------------------------------
March 31, 1999 March 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income $4,710,746 $4,573,718
Net investment income 3,808,088 $0.44 3,435,337 $0.40
Net realized and unrealized gain (loss) on investments (7,968,093) (0.93) 14,075,440 1.65
<CAPTION>
June 30, 1999 June 30, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income 4,762,468 4,410,653
Net investment income 3,856,236 0.45 3,260,991 0.38
Net realized and unrealized gain on investments 7,903,688 0.92 4,030,073 0.47
<CAPTION>
September 30, 1999 September 30, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income 5,094,589 4,341,687
Net investment income 4,072,977 0.47 3,142,399 0.37
Net realized and unrealized loss on investments (5,083,113) (0.59) (9,389,983) (1.10)
<CAPTION>
December 31, 1999 December 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income 4,562,018 4,899,738
Net investment income 3,698,382 0.44 4,007,273 0.47
Net realized and unrealized gain (loss) on investments (2,902,947) (0.34) 4,168,261 0.49
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7. CHANGE IN INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP ("PwC") resigned as the Trust's principal
accountant, effective September 7, 1999. The Trust's Audit Committee
recommended engaging Deloitte & Touche LLP as the principal accountant to
audit the Trust's financial statements for fiscal year 1999. The Board of
Trustees approved the appointment of Deloitte & Touche LLP at a meeting
held on October 22, 1999.
For fiscal years 1997 and 1998, and during the period prior to PwC's
resignation, the Trust and PwC did not have any disagreements on any matter
of accounting principles or practices, financial statement disclosures, or
auditing scope or procedure, that either (1) have not been resolved to
PwC's satisfaction and (2) or, if not resolved to PwC's satisfaction, would
have caused it to make a reference to the subject matter of the
disagreement in connection with its report. Moreover, PwC's report on the
Trust's financial statements for the fiscal years 1997 and 1998 did not
contain an adverse opinion or a disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting
principles.
8. SUBSEQUENT EVENTS
On January 1, 2000, Massachusetts Mutual Life Insurance Company
("MassMutual"), the Trust's investment adviser, consolidated its investment
management organization into David L. Babson and Company Incorporated
("Babson"), a MassMutual subsidiary that is a federally registered
investment adviser (the "Reorganization"). The employees of MassMutual's
Investment Management Division and its Investment Management business were
transferred to Babson. MassMutual owns and controls approximately 98% of
the voting stock of Babson through various subsidiaries. As a result of the
Reorganization, MassMutual assigned its investment advisory contract with
the Trust to Babson. The Trustees of the Trust, including a majority of the
Trustees who are disinterested, approved the assignment. No increase in
fees or change in portfolio management personnel for the Trust occurred as
a result of the Reorganization or the assignment of the advisory contract
to the Trust.
30
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
MASSMUTUAL CORPORATE INVESTORS
------------------------------------------------------------------------------
To the Shareholders and the Board of Trustees of MassMutual Corporate
Investors
- --------------------------------------------------------------------------------
We have audited the accompanying consolidated statement of assets and
liabilities of MassMutual Corporate Investors (the "Trust"), including the
schedule of investments, as of December 31, 1999, and the related consolidated
statements of operations, cash flows, changes in net assets, and the
consolidated financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The financial statements
of the Trust for the year ended December 31, 1998 and the financial highlights
for each of the years in the nine-year period then ended were audited by other
auditors, whose report, dated February 25, 1999 expressed an unqualified opinion
on those statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities owned
at December 31, 1999 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Trust
as of December 31, 1999, the results of its operations, its cash flows, its
changes in net assets, and financial highlights for the year then ended in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
New York, New York
February 18, 2000
31
<PAGE>
- --------------------------------------------------------------------------------
MEMBERS OF THE
Board of Trustees
Photo of
Stuart H. Reese
Chief Investment Officer, Massachusetts Mutual Life Insurance Company
Photo of
Milton Cooper
Chairman, Kimco Realty Corp.
Photo of
Donald E. Benson*
Executive Vice President and Director, Marquette Bancshares Inc.
Photo of
Richard G. Dooley
Retired Executive Vice President and Chief Investment Officer, Massachusetts
Mutual Life Insurance Company
Photo of
Marshall D. Butler
Chairman, Nitzanim AVX Kyocera
Venture Capital Fund
Photo of
Donald Glickman
Chairman, Donald Glickman & Company, Inc.
Photo of
Corine T. Norgaard
Dean, Barney School of Business and Public Administration, University of
Hartford
Photo of
Jack A. Laughery
Chairman, Laughery Investments
Photo of Martin T. Hart*
President and Director, H Corporation
*Member of Audit Committee
32
<PAGE>
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
MassMutual Corporate Investors offers a Dividend Reinvestment and Share Purchase
Plan. The Plan provides a simple way for shareholders to add to their holdings
in the Trust through the receipt of dividend shares issued by the Trust or
through the reinvestment of cash dividends in Trust shares purchased in the open
market. A shareholder may join the Plan by filling out and mailing an
authorization card to Shareholder Financial Services, Inc., the Transfer Agent.
Participating shareholders will continue to participate until they notify the
Transfer Agent, in writing, of their desire to terminate participation. Unless a
shareholder elects to participate in the Plan, he or she will, in effect, have
elected to receive dividends and distributions in cash.
Participating shareholders may also make additional contributions to the Plan
from their own funds. Such contributions may be made by personal check or other
means in an amount not less than $10 nor more than $5,000 per quarter.
Whenever the Trust declares a dividend payable in cash or shares, the Transfer
Agent, acting on behalf of each participating shareholder, will take the
dividend in shares only if the net asset value is lower than the market price
plus an estimated brokerage commission as of the close of business on the
valuation day. The valuation day is the last day preceding the day of dividend
payment. When the dividend is to be taken in shares, the number of shares to be
received is determined by dividing the cash dividend by the net asset value as
of the close of business on the valuation date or, if greater than net asset
value, 95% of the closing share price. If the net asset value of the shares is
higher than the market value plus an estimated commission, the Transfer Agent,
consistent with obtaining the best price and execution, will buy shares on the
open market at current prices promptly after the dividend payment date.
The reinvestment of dividends does not, in any way, relieve participating
shareholders of any federal, state or local tax. For federal income tax
purposes, the amount reportable in respect of a dividend received in newly-
issued shares of the Trust will be the fair market value of the shares received,
which will be reportable as ordinary income and/or capital gains.
As compensation for its services, the Transfer Agent receives a fee of 5% of any
dividend and cash contribution (in no event in excess of $2.50 per distribution
per shareholder.)
Any questions regarding the Plan should be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment
and Share Purchase Plan, P.O. Box 173673, Denver CO 80217-3673.
OFFICERS
- --------------------------------------------------------------------------------
Stuart H. Reese
Chairman
Richard G. Dooley
Vice Chairman
Robert E. Joyal
President
Charles C. McCobb, Jr.
Vice President and Chief Financial Officer
Stephen L. Kuhn
Vice President and Secretary
Michael P. Hermsen
Vice President
William N. Holm
Vice President
Mary Wilson Kibbe
Vice President
Michael L. Klofas
Vice President
Richard C. Morrison
Vice President
Clifford M. Noreen
Vice President
Mark B. Ackerman
Treasurer
Victoria Fortier
Comptroller
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MASSMUTUAL
Corporate Investors
