MASSMUTUAL
CORPORATE INVESTORS
2000 ANNUAL REPORT
G R O W T H | S T R E N G T H | D I V E R S I T Y
MASSMUTUAL CORPORATE INVESTORS
INVESTMENT OBJECTIVE AND POLICY
The Trust's investment objective is to combine the stability of current income
offered by fixed income investments with the opportunity for growth offered by
capital gains. To fulfill that objective, the Trust invests in fixed income
securities, securities that can be converted into equities, and equities. The
majority of these securities are in the form of private placements, meaning that
they are not available to the general public.
Many of these investments consist of senior or subordinated debt issued by
companies that have a need for growth capital or who are being acquired in
leveraged transactions. A number of these securities are considered to have a
higher risk than investment grade securities, because the companies involved are
either smaller and/or contain a higher level of leverage.
The Trust is managed on a total return basis. Based on change in net asset value
with reinvested dividends, the Trust was ranked #1 for the three-and ten-year
periods ending December 31, 2000 among the closed-end bond funds tracked by
Lipper, Inc. Lipper, Inc. ranked the Trust #4 for the five-year period ending
December 31, 2000. Dividends are paid to shareholders quarterly in January, May,
August and November. The Trust intends to distribute nearly all of its net
income to shareholders each year. Dividends are paid in cash, unless the
shareholder elects to participate in the Dividend Reinvestment and Share
Purchase Plan.
In this report you will find a complete listing of the Trust's holdings. We
encourage you to read this section carefully for a better understanding of the
Trust. We cordially invite all shareholders to attend the MassMutual Corporate
Investors Annual Meeting of Shareholders, which will be held on April 20, 2001
at 2:00p.m. in Springfield, Massachusetts.
_______________________________________
MASSMUTUAL CORPORATE INVESTORS IS A CLOSED-END INVESTMENT COMPANY, FIRST OFFERED
TO THE PUBLIC NEARLY 30 YEARS AGO AND IS LISTED ON THE NEW YORK STOCK EXCHANGE.
1
MASSMUTUAL CORPORATE INVESTORS
[PHOTO] [PHOTO]
ROBERT E. JOYAL, CFA STUART H. REESE, CFA
PRESIDENT CHAIRMAN
Accumulated value of $100 reinvested in MassMutual Corporate Investors vs. the
average of stocks and bonds
THE TRUST'S PORTFOLIO GREW FASTER THAN THE
BOND INDEX OR A COMBINATION OF STOCKS AND BONDS.
o MassMutual Corporate Investors (1)
o S&P Industrial Stock Index (2)
o Lehman Brothers Government/Corporate Bond Index (3)
o 50% S&P Industrial Stock Index
and 50% Lehman Brothers Government/
Corporate Bond Index
Year Value of $100 invested 01/01/77
----
01/77 100 100 100 100
102.99 91.77 97.38 115.65
104.21 98.87 101.54 123.51
106.6 117.56 112.08 139.9
1980 109.86 157.58 133.72 152.92
117.84 146.78 132.31 176.72
154.49 178.14 166.31 212.41
166.83 219.3 193.07 254.93
191.89 228.69 210.29 290.64
1985 232.76 298.83 265.8 369.61
269.12 354.71 311.92 493.84
275.28 385.78 330.53 515.77
296.15 447.51 371.83 568.37
338.29 579.34 458.82 619.13
1990 366.3 574.19 470.24 621.73
425.39 751.09 588.24 735.32
457.63 793.98 625.81 862.97
508.11 865.84 686.97 1064.99
490.27 899 694.64 1090.13
1995 584.6 1210.41 897.51 1458.15
601.56 1489.17 1045.36 1683
660.21 1951.41 1305.81 2139.77
722.66 2610.4 1666.53 2506.1
707.13 3285.19 1996.16 2694.81
2000 790.86 2750.93 1770.9 2892.16
1 The Trust's return reflects change in the net asset value per share assuming
reinvestment of all distributions. Past performance is no indicator of future
results.
2 The S&P Industrial Index is a capitalization-weighted index of stocks designed
to measure the performance of the industrial sector of the Standard and Poor's
500 Index (R) (the S&P 500 Index (R) minus financials, utilities and
transportation stocks). The index does not incur expenses and cannot be
purchased directly by investors.
3 The Lehman Brothers Government/Corporate Bond Index is an unmanaged measure of
major U.S. Government and investment grade corporate bonds with more than one
year remaining until the scheduled payment of principal. The index does not
incur expenses and cannot be purchased directly by investors.
2
To Our Shareholders
I am pleased to share with you MassMutual Corporate Investors' Annual Report
covering the year ended December 31, 2000. In a particularly stormy year for the
markets, we are pleased the Trust was able to end the year with an annual total
rate of return of 7.28% as measured by the change in net asset value with
reinvested dividends. The Trust's net assets as of the end of 2000 were
$178,130,497. Quarterly dividends were at $.45 per share in May and were
increased to $.47 per share in July, October and December. Including the extra
dividend of $.90 per share in December, dividends totaling $2.76 per share were
distributed in 2000. The net asset value per share of the Trust decreased
slightly in 2000 to $20.74 from $22.00 in 1999.
REVIEW OF 2000
The year 2000 brought an end to the longest economic expansion in our nation's
history. Instead of the debate over whether the millennium began in 2000 or
2001, 2000 will be remembered as the year when the Internet suddenly became a
place of business - and evaluated using more traditional measures.
The year began with an incredible surge in the stock market, in particular in
the high-tech and biotech sectors. The first bad news of the season came from on
line retailers, whose holiday business was somewhat less than expected. Then the
Federal Reserve, in an attempt to slow the economy, raised rates incrementally
through May. The market responded with steep declines. The Internet bubble
burst, as IPOs began to fail, companies began laying off employees or just
shutting down entirely. The NASDAQ, home to most publicly traded high tech
stocks, experienced the most significant annual drop in its history, plunging
more than 39% by the end of the year. In contrast, the S&P 500 was relatively
calm, losing just over 9%, yet it was its worst return since 1977. The Dow Jones
Industrial Average broke a 9-year winning streak, falling over 4%.
Growth stocks, defined as the stocks of those companies expected to grow faster
than the economy in general, as a category, were hit very hard, because the
category includes so many high tech companies. As a result, funds that focused
on growth stocks tended to perform poorly in 2000.
Bonds fared far better. Interest rates, while rising somewhat, stabilized in the
last half of the year. Total return on long-term Treasuries went from an 8% loss
in 1999 to a 20% gain in 2000. The Lehman Brothers Government/Corporate Bond
Index returned 11.84% and the Merrill Lynch High Yield Bond Index lost 5.10%,
still better than stocks.
_______________________________________
IN A PARTICULARLY STORMY YEAR FOR THE MARKETS, WE ARE PLEASED THE TRUST WAS ABLE
TO END THE YEAR WITH AN ANNUAL TOTAL RATE OF RETURN OF 7.28% AS MEASURED BY THE
CHANGE IN NET ASSET VALUE WITH REINVESTED DIVIDENDS.
3
MASSMUTUAL CORPORATE INVESTORS
FOR THE 5-YEAR PERIOD ENDED DECEMBER 31, 2000, THE TRUST RANKED #4 OUT OF THE
375 CLOSED END BOND FUNDS TRACKED BY LIPPER, INC.
o MassMutual MassMutual Corporate Investors
(Based on earnings and change in net asset value)
o S&P Industrial Stock Index
o Lehman Brothers Government/ Corporate Bond Index
-------------------------------------------------
Total Annual Return (as of 12/31 each year)
-------------------------------------------------
40%
---- 31.04 33.77
30%
---- 23.03 27.14 25.89
20%
---- 15.42 17.12 11.84
10%
---- 2.90 9.75 9.46 7.53 7.28
0%
-------- -2.15
-10%
---- -16.26
-20%
-------------------------------------------------
1996 1997 1998 1999 2000
WHAT IT MEANS TO THE TRUST
How does this news relate to the activities of the Trust? Reading our investment
objective, it is clear that we look for companies that provide opportunities for
long-term growth. However, we have been able to limit the impact of the current
market environment on the portfolio because our focus is on the everyday goods
and services that are part of any economic climate. More specifically, these
events comprised the highlights of the Trust's activity in 2000:
The Trust experienced major gains from five separate transactions during the
year. TREND TECHNOLOGIES, a manufacturer and assembler of plastic injection
molded parts that we acquired in 1997, was sold to another financial buyer. We
retained a small equity position as a part of the sale with a gain of $9.1
million for the Trust.
We acquired MERCURY COMPUTER, a designer and marketer of high performance
computer systems for computationally intense scientific and engineering
applications, originally in 1987. We took our remaining gains by selling our
position during the first quarter, bringing $2.1 million into the Trust. Our
total gains in this security over the life of our investment were over $14
million.
_______________________________________
WE HAVE BEEN ABLE TO LIMIT THE IMPACT OF THE CURRENT MARKET ENVIRONMENT ON THE
PORTFOLIO BECAUSE OUR FOCUS IS ON THE EVERYDAY GOODS AND SERVICES THAT ARE PART
OF ANY ECONOMIC CLIMATE.
4
[PHOTO] [PHOTO] [PHOTO]
CHARLES C. MCCOBB, CFA STEPHEN L. KUHN CLIFFORD M. NOREEN
VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT
CHIEF FINANCIAL OFFICER SECRETARY
PLAYCORE,INC., a manufacturer and distributor of home playground equipment and
accessories was also sold to another financial buyer. We acquired the securities
in 1997 and the total gain to the Trust was $2.2 million.
LATIN COMMUNICATIONS is an operator of Spanish-language media in North America
that we acquired in 1998. This sale to a strategic buyer who has other interests
in Spanish media properties brought a gain of $1.1 million to the Trust.
HARTZELL MANUFACTURING is a provider of contract engineering, manufacturing and
assembly services for a variety of industrial manufacturing companies. We
acquired the security originally in 1997. When the company was sold to a third
party, the Trust experienced gains of $1.9 million.
These gains allowed us to essentially offset the realized losses and write-downs
in the portfolio resulting from a softening in the economic climate and decline
in the stock markets during the year.
The year 2000 was also an important year for new investments. The Trust closed
25 deals during the year, including 21 new investments and four additions to
current positions. Among the new holdings in the portfolio:
o ADORN,INC., a manufacturer of wall panels, cabinets, moldings and
countertops for houses and recreational vehicles.
o ENZYMATIC THERAPY,INC., a manufacturer and distributor of branded natural
medicines and nutritional supplements.
o INTEGRATION TECHNOLOGY SYSTEMS,INC., a manufacturer of steel protective
computer and network systems for industrial and office environments.
o LANCASTER LABORATORIES, one of the largest laboratory testing operations in
the United States.
o MOSS INC., a manufacturer of large display and exhibit structures.
o PLASSEIN PACKAGING,INC., a manufacturer of flexible packaging products.
o SPECTAGUARD ACQUISITION LLC, the tenth largest provider of security officers
in the United States.
o STRATEGIC EQUIPMENT & SUPPLY PARTNERS, INC., a provider of kitchen and
restaurant design, equipment fabrication and installation services.
o TRONAIR, INC., A designer, engineer and manufacturer of ground support
equipment for the business, commuter and commercial aviation markets.
You will find details of all the Trust's holdings in the Consolidated Schedule
of Investments.
_______________________________________
THE TRUST CLOSED 25 DEALS DURING THE YEAR,INCLUDING 21 NEW INVESTMENTS AND FOUR
ADDITIONS TO CURRENT POSITIONS.
5
MASSMUTUAL CORPORATE INVESTORS
PREVIEW OF 2001
It is already clear that the Federal Reserve Board is playing an active role in
working to prevent recession. In the first week of January, the Federal Reserve
Board reduced rates by one half of one percent and followed by a second one
half-point reduction in the last week of January. The Federal Reserve Board's
action has already impacted mortgage rates, and they could drop again in
anticipation of future downward movement.
While the stock market seems to be responding to the Federal Reserve Board's
action, it is likely that 2001 could continue to be a volatile environment. Many
of the fundamental issues that characterized the downfall of Internet stocks
remain unchanged. Instead of the feverish embrace that seemed to accompany any
new offering, investors are sitting back and waiting for strong earnings reports
- just as they would for any bricks and mortar company. With so many people
wondering if they should get ready for recession or catch their breath before a
new expansion, the theme for 2001 is probably "back to basics."
The Trust will continue its disciplined approach of focusing on investing in
companies that offer good value on a risk-adjusted basis. We believe that our
investment approach has provided solid investment returns to the Trust in the
past and is particularly well suited to do so in this unsettled future.
Sincerely,
/s/ Robert Joyal
Robert Joyal
President
_______________________________________
THE TRUST WILL CONTINUE ITS DISCIPLINED APPROACH OF FOCUSING ON
INVESTING IN COMPANIES THAT OFFER GOOD VALUE ON A RISK-ADJUSTED BASIS.
TAX INFORMATION
2000 DIVIDEND PAYMENTS RECORD DATE NET INVESTMENT INCOME SHORT-TERM GAINS TAX EFFECT
--------------------------------------------------------------------------------------------------------
Regular 05/08/00 0.4500 --
07/31/00 0.4700 --
10/31/00 0.4700 --
12/31/00 0.4700 --
Extra 12/31/00 0.0989 0.8011
--------------------------------------------------------------------------------------------------------
Total Dividends 1.9589 0.8011 $2.76
represents
income for
tax purposes
THE FOLLOWING TABLE SUMMARIZES THE TAX EFFECTS OF THE RETENTION OF CAPITAL GAINS FOR 2000:
AMOUNT PER SHARE FORM 2439
--------------------------------------------------------------------------------------------------------
2000 Gains Retained 0.3860 Line 1a
Long-Term Gains Retained (20%) 0.3860
Taxes Paid 0.1351 Line 2*
Basis Adjustment 0.2509 **
* 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).
ANNUAL DIVIDEND AMOUNT QUALIFIED FOR DIVIDEND RECEIVED DEDUCTION*** INTEREST EARNED ON U.S.GOV'T. OBLIGATIONS
PER SHARE PERCENT AMOUNT PER SHARE PERCENT AMOUNT PER SHARE
------------------------------------------------------------------------------------------------------------------------------------
$2.76 1.76313% 0.048662 0.0000% 0.0000
*** Not available to individual shareholders.
6
FINANCIAL REPORT
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES 8
CONSOLIDATED STATEMENTS OF OPERATIONS 9
CONSOLIDATED STATEMENTS OF CASH FLOWS 10
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS 11
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS 12
CONSOLIDATED SCHEDULE OF INVESTMENTS 13-32
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS 33-35
INDEPENDENT AUDITORS REPORT 36
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2000 and 1999
------------ ------------
2000 1999
------------ ------------
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost 2000 -$197,300,778 ;1999 -$194,367,359) $176,899,997 $174,084,140
Corporate public securities at market value
(Cost 2000 -$30,146,217 ;1999 -$32,405,364) 22,247,567 37,418,479
Short-term securities at cost plus earned discount
which approximates market value 6,964,699 14,091,849
------------------------------------------------------------------------------------
206,112,263 225,594,468
Cash 1,077,699 209,184
Interest and dividends receivable, net 4,601,363 3,667,973
Receivable for investments sold 1,241,408 217,412
------------------------------------------------------------------------------------
TOTAL ASSETS $213,032,733 $229,689,037
====================================================================================
LIABILITIES:
Dividend payable $ 11,764,868 $ 12,537,743
Payable for investments purchased 725,788 --
Management fee payable 597,105 473,586
Note payable 20,000,000 20,000,000
Interest payable 187,711 136,211
Accrued expenses 113,128 80,738
Accounts payable 353,516 --
Accrued taxes 1,160,120 7,499,999
------------------------------------------------------------------------------------
TOTAL LIABILITIES 34,902,236 40,728,277
------------------------------------------------------------------------------------
NET ASSETS:
Common shares, 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 98,201,268 84,272,696
Undistributed net investment income 1,424,860 1,378,060
Undistributed net realized gain on investments 2,152,086 13,928,572
Net unrealized depreciation of investments (28,299,431) (15,270,282)
------------------------------------------------------------------------------------
TOTAL NET ASSETS 178,130,497 188,960,760
------------------------------------------------------------------------------------
TOTAL LIABILITIES AND NET ASSETS $213,032,733 $229,689,037
====================================================================================
COMMON SHARES ISSUED AND OUTSTANDING 8,587,495 8,587,495
====================================================================================
NET ASSET VALUE PER SHARE $ 20.74 $ 22.00
====================================================================================
See Notes to Financial Statements
8
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2000 and 1999
------------ ------------
2000 1999
------------ ------------
INVESTMENT INCOME:
Interest $ 20,494,108 $ 18,344,363
Dividends 417,888 785,458
------------------------------------------------------------------------------------
TOTAL INCOME 20,911,996 19,129,821
------------------------------------------------------------------------------------
EXPENSES:
Management fees 2,410,765 2,013,708
Trustees' fees and expenses 140,139 136,706
Transfer Agent/Registrar's expenses 68,000 114,000
Interest 1,136,507 1,066,000
Reports to shareholders 94,000 48,000
Audit and legal 63,582 58,500
Other 130,159 257,224
------------------------------------------------------------------------------------
TOTAL EXPENSES 4,043,152 3,694,138
------------------------------------------------------------------------------------
NET INVESTMENT INCOME (2000 -$1.96 PER SHARE;
1999 -$1.80 PER SHARE) 16,868,844 15,435,683
------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain on investments 10,191,648 29,791,363
Provision for federal income taxes (1,160,120) (7,499,999)
------------------------------------------------------------------------------------
Net realized gain on investments 9,031,528 22,291,364
Net change in unrealized depreciation of investments (13,029,149) (30,341,829)
------------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (3,997,621) (8,050,465)
------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $12,871,223 $7,385,218
====================================================================================
See Notes to Financial Statements
9
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2000 and 1999
------------ ------------
2000 1999
------------ ------------
NET INCREASE (DECREASE) IN CASH:
Cash flows from operating activities:
Interest and dividends received $18,606,011 $18,499,291
Interest expense paid (1,085,007) (1,066,000)
Operating expenses paid (2,397,218) (2,718,382)
Federal income tax paid (7,499,999) (5,830,116)
------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 7,623,787 8,884,793
------------------------------------------------------------------------------------
Cash flows from investing activities:
Change in short-term portfolio securities, net 7,590,766 (5,481,456)
Purchase of portfolio securities (124,946,860) (146,353,410)
Proceeds from disposition of portfolio securities 135,075,183 156,105,881
------------------------------------------------------------------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 17,719,089 4,271,015
------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING AND
INVESTING ACTIVITIES 25,342,876 13,155,808
------------------------------------------------------------------------------------
Cash flows from financing activities:
Cash dividends paid from net investment income (15,858,240) (14,039,030)
Cash dividends paid from net realized gain
on investments (8,616,121) (2,964,210)
------------------------------------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES (24,474,361) (17,003,240)
------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 868,515 (3,847,432)
Cash - beginning of year 209,184 4,056,616
------------------------------------------------------------------------------------
CASH - END OF YEAR $1,077,699 $209,184
====================================================================================
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH
FROM OPERATING AND INVESTING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $12,871,223 $7,385,218
------------------------------------------------------------------------------------
Decrease in investments 19,482,205 2,908,081
(Increase) decrease in interest and dividends
receivable,net (933,390) 289,476
(Increase) decrease in receivable for
investments sold (1,023,996) 984,178
Increase in payable for investments purchased 725,788 --
Increase (decrease) in management fee payable 123,519 (38,263)
Increase in interest payable 51,500 --
Increase in accounts payable 353,516 --
Increase (decrease) in accrued expenses 32,390 (51,981)
(Decrease) increase in accrued taxes (6,339,879) 1,679,099
------------------------------------------------------------------------------------
TOTAL ADJUSTMENTS TO NET ASSETS
FROM OPERATIONS 12,471,653 5,770,590
------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING AND
INVESTING ACTIVITIES $25,342,876 $13,155,808
====================================================================================
See Notes to Financial Statements
10
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2000 and 1999
------------ ------------
2000 1999
------------ ------------
DECREASE IN NET ASSETS:
Operations:
Net investment income $16,868,844 $15,435,683
Net realized gain on investments 9,031,528 22,291,364
Net change in unrealized depreciation
of investments (13,029,149) (30,341,829)
------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 12,871,223 7,385,218
Dividends to shareholders from:
Net investment income (2000 -$1.96 per share;
1999 -$1.73 per share) (16,822,044) (14,827,740)
Net realized gains on investments (2000 -$.80
per share;1999 -$1.00 per share) (6,879,442) (8,616,121)
------------------------------------------------------------------------------------
TOTAL DECREASE (10,830,263) (16,058,643)
NET ASSETS, BEGINNING OF YEAR 188,960,760 205,019,403
------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME IN 2000 -$1,424,860;
1999 -$1,378,060) $178,130,497 $188,960,760
====================================================================================
See Notes to Financial Statements
11
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
Selected data for each common share outstanding:
------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995 1994 1993 1992 1991
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value:
Beginning of year $22.00 $23.87 $22.65 $20.23 $19.80 $16.47 $17.47 $15.38 $14.37 $13.37
Net investment income 1.96 1.80 1.62 1.49 1.32 1.32 1.16 1.08 1.11 1.40
Net realized and unrealized
gain (loss) on investments (0.46) (0.94) 1.51 2.87 0.92 3.88 (0.76) 2.41 1.30 1.00
-------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 1.50 0.86 3.13 4.36 2.24 5.20 0.40 3.49 2.41 2.40
-------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income to common shareholders (1.96) (1.73) (1.60) (1.42) (1.35) (1.32) (1.16) (1.08) (1.12) (1.40)
Distributions from net realized
gain on investments to common
shareholders (0.80) (1.00) (0.31) (0.52) (0.46) (0.55) (0.24) (0.32) (0.28) --
-------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.76) (2.73) (1.91) (1.94) (1.81) (1.87) (1.40) (1.40) (1.40) (1.40)
-------------------------------------------------------------------------------------------------------------------------------
Net asset value:
End of year $20.74 $22.00 $23.87 $22.65 $20.23 $19.80 $16.47 $17.47 $15.38 $14.37
-------------------------------------------------------------------------------------------------------------------------------
Per share market value:
End of year $22.00 $21.38 $23.31 $25.75 $19.25 $17.88 $15.57 $14.88 $13.07 $14.00
===============================================================================================================================
Total investment return:
Market value 17.55% 7.35% 0.77% 52.43% 22.44% 29.19% 14.03% 24.84% 3.18% 45.83%
Net asset value 7.28% 7.53% 17.12% 27.14% 15.42% 33.76% 2.36% 23.41% 17.36% 18.27%
Net assets (in millions):
End of period $178.13 $188.96 $205.02 $192.86 $172.27 $168.56 $140.20 $148.70 $131.00 $122.30
Ratio of operating expenses
to average net assets 1.47% 1.30% 1.62% 1.69% 1.70% 1.78% 1.76% 1.63% 1.27% 1.44%
Ratio of interest expense
to average net assets 0.58% 0.52% 0.52% 0.56% 0.61% 0.67% 0.72% 1.30% 1.42% 1.33%
Ratio of total expenses
to average net assets 2.05% 1.82% 2.14% 2.25% 2.31% 2.45% 2.48% 2.93% 2.69% 2.77%
Ratio of net investment
income to average
net assets 8.56% 7.63% 6.76% 6.66% 6.44% 7.09% 6.75% 6.61% 7.44% 9.70%
Portfolio turnover 59.75% 68.04% 60.14% 66.23% 64.89% 66.90% 46.68% 76.01% 60.59% 45.96%
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
12
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares, Units,
Warrants,
Ownership
or Principal Acquisition Fair Value
CORPORATE RESTRICTED SECURITIES - 99.31%:(A) Amount Date Cost At 12/31/00
------------------------------------------------------------------------------------------------------------------------------
PRIVATE PLACEMENT INVESTMENTS - 94.97%
A T I ACQUISITION CORPORATION
A MANUFACTURER OF DISPOSABLE NONWOVEN PROTECTION PRODUCTS.
------------------------------------------------------------------------------------------------------------------------------
Senior Floating Rate Revolving Credit
Note due 2003 $ 933,862 12/16/98 $ 933,862 $ 928,073
10%Senior Secured Note due 2006 $2,068,183 12/16/98 2,068,183 1,999,106
12%Subordinated Note due 2008 $1,590,910 12/16/98 1,495,455 1,497,205
Common Stock (B) 318,182 shs. 12/16/98 318,182 286,364
Warrant, exercisable until 2008, to purchase
common stock at $1 per share (B) 227,273 shs. 12/16/98 95,455 2,273
---------------------------
4,911,137 4,713,021
---------------------------
ADORN, INC.
A MANUFACTURER OF WALL PANELS, CABINETS, MOLDINGS AND COUNTERTOPS FOR HOUSES AND RECREATIONAL VEHICLES.
------------------------------------------------------------------------------------------------------------------------------
12.5% Subordinated Note due 2010 $2,125,000 2/29/00 1,830,705 2,072,512
Warrant, exercisable until 2010, to purchase
common stock at $.02 per share (B) 364 shs. 2/29/00 307,759 4
---------------------------
2,138,464 2,072,516
---------------------------
ADVENTURE ENTERTAINMENT CORPORATION
------------------------------------------------------------------------------------------------------------------------------
An owner and operator of the med family entertainment centers.
19% Senior Subordinated Note due 2004 $207,048 12/9/99 207,048 103,524
7% Redeemable Series B Preferred Stock 2,041 shs. 10/31/97 1,989,985 497,485
Warrant, exercisable until 2005, to purchase
Class A common stock at $.01 per share (B) 6,447 shs. 10/31/97 25,005 64
---------------------------
2,222,038 601,073
---------------------------
ALPHA SHIRT COMPANY
A DOMESTIC DISTRIBUTOR OF IMPRINTABLE APPAREL AND OTHER RELATED ITEMS.
------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2007 $3,181,500 4/30/99 2,791,955 3,210,770
Common Stock (B) 1,060 shs. 4/30/99 1,059,950 628,704
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 576 shs. 4/30/99 445,410 341,878
---------------------------
4,297,315 4,181,352
---------------------------
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 3,062,893 3,480,400
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 58 shs. 11/2/98 513,333 431,343
---------------------------
3,576,226 3,911,743
---------------------------
13
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares, Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
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 $ 581,596 12/23/97 $ 581,596 $ 290,798
Senior Secured Tranche A Floating Rate
Note due 2004 $2,294,000 * 2,294,000 1,147,000
17.75% Senior Secured Tranche B Note
due 2005 $ 727,841 12/23/97 727,841 363,920
Limited Partnership Interests of
CM Equity Partners (B) 6.96% int. 12/22/97 783,881 7,868
Warrant, exercisable until 2005, to purchase
common stock at $.81 per share (B) 214,419 shs. 12/23/97 - 2,144
---------------------------
*12/23/97 and 1/31/99 4,387,318 1,811,730
---------------------------
BETTER MINERALS & AGGREGATES
A PRODUCER OF HIGH GRADE INDUSTRIAL AND SPECIALTY SILICA SANDS.
------------------------------------------------------------------------------------------------------------------------------
14%Redeemable Preferred Stock 757 shs. 9/30/99 531,733 536,708
Redeemable Preferred Stock Series A (B) 42,001 shs. 12/19/96 388,898 350,007
Convertible Preferred Stock Series B, convertible
into Series B common stock at $9.26 per share (B) 84,002 shs. 12/19/96 777,802 700,014
Common Stock (B) 20,027 shs. 9/30/99 799,068 719,161
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. * 128,502 20,826
---------------------------
*12/19/96 and 9/30/99 2,626,003 2,326,716
---------------------------
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 8/29/96 652,244 130,449
Senior Secured Series A Floating Rate
Term Note due 2002 $2,183,497 8/29/96 2,183,497 436,699
12% Series B Term Note due 2004 $ 533,000 8/29/96 517,509 106,600
Membership Interests (B) 5.63% int. 8/29/96 125,750 -
Warrant, exercisable until 2004, to purchase
membership interests at $.01 per interest (B) 36 int. 8/29/96 26,650 -
---------------------------
3,505,650 673,748
---------------------------
CAINS FOODS,L.P.
A PRODUCER OF MAYONNAISE, SAUCE AND PICKLE PRODUCTS FOR BOTH THE RETAIL AND FOOD SERVICE MARKETS.
------------------------------------------------------------------------------------------------------------------------------
8% Junior Subordinated Convertible
Note due 2004, convertible into partnership
points at $1,388.89 per point $ 108,108 9/29/95 108,108 93,784
Warrant, exercisable until 2006, to purchase
partnership points at $.01 per point (B) 39 pts. 9/29/95 50,261 -
---------------------------
158,369 93,784
---------------------------
14
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
CAPESUCCESS LLC
A PROVIDER OF DIVERSIFIED STAFFING SERVICES.
------------------------------------------------------------------------------------------------------------------------------
Preferred Membership Interests 1,882 int. 3/31/98 $8,395 $7,556
Common Membership Interests 24,318 int. 3/31/98 108,486 97,640
---------------------------
116,881 105,196
---------------------------
CAPITOL SPECIALTY PLASTICS, INC.
A PRODUCER OF DESSICANT STRIPS USED FOR PACKAGING PHARMACEUTICALS PRODUCTS.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 109 shs. * 503 403
---------------------------
*12/30/97 and 5/29/99
CHAPARRAL RESOURCES, INC. - O.T.C.
AN INTERNATIONAL OIL AND GAS EXPLORATION AND PRODUCTION COMPANY.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 164 shs. 12/3/97 6,395 535
---------------------------
COLIBRI HOLDINGS CORPORATION
A MANUFACTURER AND DISTRIBUTOR OF WILD BIRD FEEDERS AND ACCESSORIES.
------------------------------------------------------------------------------------------------------------------------------
12.5% Senior Subordinated Note due 2008 $1,593,750 9/22/00 1,332,796 1,559,325
Common Stock (B) 1,429 shs. 9/22/00 531,250 478,120
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 843 shs. 9/22/00 265,625 8
---------------------------
2,129,671 2,037,453
---------------------------
CONSUMER PRODUCT ENTERPRISES, INC.
A MANUFACTURER OF COLORED ACRYLIC FELT FOR CONSUMER USE.
------------------------------------------------------------------------------------------------------------------------------
Senior Secured Floating Rate Revolving Credit
Notes due 2003 $ 719,015 12/8/95 719,015 503,311
10.75% Senior Secured Term Note due 2003 $ 613,774 12/8/95 613,774 429,642
12% Senior Subordinated Note due 2005 $ 800,575 12/8/95 771,929 480,345
Common Stock (B) 184,560 shs. 12/8/95 184,560 46,140
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 138,420 shs. 12/8/95 50,853 1,384
---------------------------
2,340,131 1,460,822
---------------------------
CORVEST PROMOTIONAL PRODUCTS, INC.
A MANUFACTURER AND DISTRIBUTOR OF PROMOTIONAL PRODUCTS.
------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2007 $3,863,636 * 3,606,296 3,770,909
Common Stock (B) 56 shs. * 96,591 11,643
Limited Partnership Interest 19.32% int. * 288,653 217,040
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 183 shs. * 297,203 38,043
---------------------------
*3/5/99 and 3/24/99 4,288,743 4,037,635
---------------------------
15
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares, Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
D&K HEALTHCARE RESOURCES, INC. - O.T.C.
A WHOLESALE PHARMACEUTICAL DISTRIBUTION COMPANY.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 245,989 shs. 12/29/87 $ 810,732 $ 3,169,426
---------------------------
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 2,973,409 3,344,531
8% Convertible Class B Subordinated
Promissory Note due 2008 $ 74,562 12/22/99 74,562 71,698
Class B common stock (B) 26,097 shs. 12/22/99 260,965 234,869
Limited Partnership Interests 8.70% int. 12/22/99 521,754 469,581
Warrants, exercisable until 2007, to purchase
common stock at $.01 per share (B) 45,255 shs. 12/22/99 413,816 453
---------------------------
4,244,506 4,121,132
---------------------------
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 2,558,182 2,110,500
Membership Interests of MM/Lincap
Diversco Investments Ltd., LLC (B) 3.48% int. 8/27/98 734,090 367,045
Warrant, exercisable until 2003 & 2006, to
purchase common stock of DHI Holdings, Inc
at $.01 per share (B) 3,627 shs. * 403,427 36
---------------------------
*10/24/96 and 8/28/98 3,695,699 2,477,581
---------------------------
ENZYMATIC THERAPY, INC.
A MANUFACTURER AND DISTRIBUTOR OF BRANDED NATURAL MEDICINES AND NUTRITIONAL SUPPLEMENTS.
------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2009 $1,593,750 3/30/00 1,325,889 1,581,956
Limited Partnership Interest 1.37% int. 3/30/00 531,250 478,125
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 478 shs. 3/30/00 255,000 5
---------------------------
2,112,139 2,060,086
---------------------------
EVANS CONSOLES, INC.
A DESIGNER AND MANUFACTURER OF CONSOLES AND CONTROL CENTER SYSTEMS.
------------------------------------------------------------------------------------------------------------------------------
Senior Secured Tranche A Floating Rate Note
due 2005 $1,213,100 3/2/98 1,213,100 1,200,847
8.85% Senior Secured Tranche A Note due 2005 $1,213,100 3/2/98 1,213,100 1,140,314
11.75% Senior Secured Tranche B Note due 2006 $ 700,000 3/2/98 614,790 706,930
Common Stock (B) 26,906 shs. 2/11/98 94,880 75,905
Limited Partnership Interests of
CM Equity Partners (B) 1.12% int. 2/11/98 126,445 101,156
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 34,783 shs. 3/2/98 112,000 348
---------------------------
3,374,315 3,225,500
---------------------------
16
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
EXAMINATION MANAGEMENT SERVICES,INC.
A NATIONAL FULL-SERVICE EVIDENCE PROVIDER TO THE INSURANCE INDUSTRY AND A PROVIDER OF OCCUPATIONAL HEALTH TESTING.
------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2007 $2,109,637 3/16/99 $ 1,958,553 $ 2,033,690
Limited Partnership Interest (B) 5.27% int. 3/1/99 2,140,363 1,926,327
Warrants, exercisable until 2007, to purchase
common stock at $.01 per share (B) 77,233 shs. 3/16/99 175,803 77,233
---------------------------
4,274,719 4,037,250
---------------------------
FASTENERS FOR RETAIL, INC.
A DESIGNER AND MARKETER OF LOW-COST FASTENERS FOR POINT OF PURCHASE DISPLAYS AND SIGNAGE IN RETAIL ENVIRONMENTS.
------------------------------------------------------------------------------------------------------------------------------
12.5% Senior Subordinated Note due 2007 $3,650,000 12/22/99 3,221,598 3,783,590
Class B common Stock (B) 600 shs. 12/22/99 600,000 480,000
Warrant, exercisable until 2007, to purchase
common stock at $.02 per share (B) 589 shs. 12/22/99 462,927 6
---------------------------
4,284,525 4,263,596
---------------------------
FLEMING ACQUISITION CORPORATION
A SUPPLIER OF HIGH-QUALITY, PREMIUM PRINTED LABELS FOR DISTILLED SPIRITS, WINE, FOOD AND HOUSEHOLD PRODUCTS.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 545 shs. 4/28/95 272,500 46,393
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 380 shs. 4/28/95 170,455 32,323
Incentive Warrant, exercisable until 2005,
to purchase common stock at $.01 per share (B) 19 shs. 4/28/95 2,273 1,633
---------------------------
445,228 80,349
---------------------------
G C-SUN HOLDINGS, LP
A VALUE-ADDED NATIONAL DISTRIBUTOR OF MAINTENANCE, REPAIR AND OPERATING SUPPLIES SUCH AS FASTENERS, ELECTRICAL COMPONENTS AND TOOLS.
------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2008 $1,725,000 3/2/00 1,396,930 1,713,615
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 880 shs. 3/2/00 347,288 9
---------------------------
1,744,218 1,713,624
---------------------------
GOLDEN BEAR OIL SPECIALTIES
A MANUFACTURER OF ASPHALT AND SPECIALTY LUBRICATING AND PROCESSING OILS.
------------------------------------------------------------------------------------------------------------------------------
17% Senior Subordinated Note due 2005 $3,434,795 7/18/97 3,364,798 343,480
18% Bridge Preferred Stock 289 shs. 5/30/00 288,540 -
12% Preferred Stock 393 shs. 7/18/97 311,111 -
Common Stock (B) 27,073 shs. 7/18/97 77,840 -
Warrant, exercisable until 2005, to purchase
common stock at $.001 per share (B) 23,333 shs. 7/18/97 69,999 -
Warrant, exercisable until 2010, to purchase
common stock at $.001 per share (B) 17,111 shs. 7/18/97 - -
---------------------------
4,112,288 343,480
---------------------------
17
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares, Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
HAMILTON FUNERAL SERVICES
THE LARGEST PRIVATELY HELD OWNER AND OPERATOR OF FUNERAL HOMES IN THE UNITED STATES.
------------------------------------------------------------------------------------------------------------------------------
16.5% Senior Subordinated Note due 2007 $3,165,688 * $ 3,165,688 $ 2,215,982
Warrant, exercisable until 2007, to purchase
common stock at $1 per share (B) 338,280 shs. * 48,447 3,383
---------------------------
*1/25/99 and 7/16/99 3,214,135 2,219,365
---------------------------
HANOVER COMPRESSOR COMPANY
A PROVIDER OF NATURAL GAS HANDLING EQUIPMENT AND SERVICES.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 116,583 shs. 6/5/00 1,465,481 4,935,471
---------------------------
HIGHGATE CAPITAL, LLC
AN ACQUIRER OF CONTROLLING OR SUBSTANTIAL INTERESTS IN MANUFACTURING AND MARKETING ENTITIES.
------------------------------------------------------------------------------------------------------------------------------
Series A Preferred Units (B) 100,000 uts. 7/21/94 515,816 700,000
---------------------------
HUSSEY SEATING COMPANY
A MANUFACTURER OF SPECTATOR SEATING PRODUCTS.
------------------------------------------------------------------------------------------------------------------------------
Senior Secured Floating Rate Revolving
Note due 2003 $1,647,000 6/12/96 1,647,000 1,148,124
Senior Secured Floating Rate Note due 2003 $1,492,500 * 1,492,500 1,040,422
10% Senior Secured Note due 2003 $ 337,501 6/12/96 337,501 273,612
12% Subordinated Secured Note due 2006 $1,350,000 6/12/96 1,207,865 840,240
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 4,189 shs. 6/12/96 225,000 42
---------------------------
*6/12/96 and 6/11/99 4,909,866 3,302,440
---------------------------
IMMEDIENT CORPORATION
A PROVIDER OF DIVERSIFIED STAFFING SERVICES.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 6,855 shs. 3/31/98 37,702 33,932
---------------------------
INTEGRATION TECHNOLOGY SYSTEMS,INC.
A MANUFACTURER OF STEEL PROTECTIVE COMPUTER AND NETWORK SYSTEMS FOR THE INDUSTRIAL AND OFFICE ENVIRONMENTS.
------------------------------------------------------------------------------------------------------------------------------
Senior Secured Floating Rate Revolving
Note due 2007 $ 80,566 6/1/00 80,566 79,816
11% Senior Secured Note due 2007 $2,114,841 6/1/00 2,114,841 2,094,116
Common Stock (B) 228 shs. 6/1/00 262,200 209,760
---------------------------
2,457,607 2,383,692
---------------------------
JACKSON PRODUCTS, INC.
A MANUFACTURER AND DISTRIBUTOR OF A VARIETY OF INDUSTRIAL AND HIGHWAY SAFETY PRODUCTS.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 434 shs. 8/16/95 43,426 178,220
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 1,999 shs. 8/16/95 199,735 820,365
---------------------------
243,161 998,585
---------------------------
18
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares, Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
JASON, INC.
A DIVERSIFIED MANUFACTURING COMPANY SERVING VARIOUS INDUSTRIAL MARKETS.
------------------------------------------------------------------------------------------------------------------------------
13% Senior Subordinated Note due 2008 $ 963,687 8/4/00 $ 851,355 $ 962,819
14% Cumulative Redeemable
Preferred Stock Series A 289 shs. 8/4/00 289,224 285,287
Limited Partnership Interests of
Saw Mill Capital Fund II L.P.(B) 2.52% int. 8/3/00 886,550 765,979
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 50,870 shs. 8/4/00 115,412 72,794
---------------------------
2,142,541 2,086,879
---------------------------
KAPPLER SAFETY GROUP, INC.
A MANUFACTURER OF PROTECTIVE APPAREL FOR THE INDUSTRIAL/SAFETY, CLEAN ROOM AND HEALTHCARE MARKETS.
------------------------------------------------------------------------------------------------------------------------------
13% Senior Subordinated Note due 2004 $2,666,400 12/2/96 2,531,018 2,587,741
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 57,418 shs. 12/2/96 333,300 24,288
---------------------------
2,864,318 2,612,029
---------------------------
KEEPSAKE QUILTING, INC.
A SELLER OF QUILTING FABRICS, BOOKS, PATTERNS, KITS AND NOTIONS TO CONSUMERS.
------------------------------------------------------------------------------------------------------------------------------
Senior Secured Floating Rate Revolving
Note due 2005 $ 36,693 6/16/00 36,693 36,219
Senior Secured Floating Rate Tranche A
Note due 2007 $1,284,247 6/16/00 1,284,247 1,269,093
12% Senior Secured Tranche B Note due 2008 $550,392 6/16/00 506,316 544,337
Limited Partnership Interests of
Riverside XVI Holding Company L.P.(B) 5.90%int. 6/12/00 412,888 371,599
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 1,108 shs. 6/12/00 45,866 11
---------------------------
2,286,010 2,221,259
---------------------------
LANCASTER LABORATORIES, INC.
ONE OF THE LARGEST LABORATORY TESTING OPERATIONS IN THE UNITED STATES.
------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2007 $1,669,643 9/25/00 1,328,524 1,650,943
Common Stock (B) 455,357 shs. 9/25/00 455,357 409,821
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 405,485 shs. 9/25/00 348,348 4,055
---------------------------
2,132,229 2,064,819
---------------------------
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 * 3,320,019 3,552,011
Common Stock (B) 58,001 shs. * 406,003 324,806
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 108,404 shs. * 602,127 1,084
---------------------------
*12/23/98 and 1/28/99 4,328,149 3,877,901
---------------------------
19
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares, Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
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.
------------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 45,504 shs. 12/27/91 $ 38,712 $ 1,876,185
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 2,169,312 1,946,700
Limited Partnership Interests of
MDT Holdings LLC (B) 5.70% int. 4/9/99 1,099,500 109,950
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 665,776 shs. 4/9/99 603,257 6,658
---------------------------
3,872,069 2,063,308
---------------------------
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 6/28/95 461,536 461,029
Common Stock (B) 76,923 shs. 6/28/95 230,769 207,692
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 39,563 shs. 6/28/95 171,429 396
---------------------------
863,734 669,117
---------------------------
MERIT INDUSTRIES, INC.
A DESIGNER AND MANUFACTURER OF COIN-OPERATED VIDEO AND DART GAMES.
------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2006 $2,707,280 8/19/98 2,560,590 1,353,640
Limited Partnership Interests of
Riverside X Holding Company L.P.(B) 7.51% int. * 1,555,105 388,848
Warrants, exercisable until 2006, to purchase
limited partnership interests at $.01 per share (B) 1,855 int. 8/19/98 185,411 19
---------------------------
*8/12/98, 8/11/99 and 3/3/00 4,301,106 1,742,507
---------------------------
MOSS, INC.
A MANUFACTURER AND DISTRIBUTOR OF LARGE DISPLAY AND EXHIBIT STRUCTURES.
------------------------------------------------------------------------------------------------------------------------------
Senior Secured Floating Rate Revolving
Note due 2005 $ 67,240 9/21/00 67,240 66,177
Senior Secured Tranche A Floating Rate
Note due 2007 $1,344,800 9/21/00 1,344,800 1,344,800
12%Senior Secured Tranche B Note
Note due 2008 $ 420,250 9/21/00 380,710 417,980
Limited Partnership Interests of
Riverside Capital Appreciation Fund L.P.(B) 6.23% int. 9/20/00 186,867 149,494
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 463 shs. 9/21/00 40,344 5
---------------------------
2,019,961 1,978,456
---------------------------
20
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-----------------------------------------------------------------------------------------------------------------------------
NEXELL THERAPEUTICS
A PROVIDER OF CELL THERAPY TECHNOLOGY TO THE MEDICAL COMMUNITY.
-----------------------------------------------------------------------------------------------------------------------------
3% Cumulative Convertible Preferred Stock Series B, due 2008,
convertible into common stock at $11 per share 969 shs. 11/24/99 $3,875,000 $3,829,662
Warrant,exercisable until 2008, to purchase common stock at
$12 per share (B) 46,131 shs. 11/24/99 -- 461
------------------------
3,875,000 3,830,123
------------------------
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 $142,373 6/25/99 142,373 141,291
Senior Secured Floating Rate Note due 2006 $3,087,712 6/25/99 3,087,712 3,067,950
12% Senior Secured Tranche B Note due 2007 $978,814 6/25/99 852,170 955,420
Limited Partnership Interests of Riverside XIII Holding
Company L.P. 4.25% int. 6/11/99 341,189 272,976
Warrant,exercisable until 2007, to purchase common stock
at $.01 per share (B) 201 shs. 6/25/99 142,373 2
------------------------
4,565,817 4,437,639
------------------------
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 2,497,970 2,696,883
12% Senior Subordinated Note due 2008 $307,071 2/9/00 270,874 307,224
Limited Partnership Interest of Riverside VIII Holding
Company L.P.(B) 9.87%int. * 1,010,923 909,746
Warrant, exercisable until 2007, to purchase common stock
at $.01 per share (B) 28,648 shs. ** 389,188 123,503
------------------------
4,168,955 4,037,356
------------------------
* 8/7/98, 2/23/99 and 12/22/99
**8/7/98 and 2/9/00
PAR ACQUISITION CORP.
A MANUFACTURER OF FUEL HANDLING SYSTEMS FOR NUCLEAR POWER PLANTS AND HAZARDOUS WASTE.
-----------------------------------------------------------------------------------------------------------------------------
8% Convertible Preferred Stock due 2001, convertible
into common stock at $2 per share 83,333 shs. 2/5/93 166,667 270,000
Common Stock (B) 133,333 shs. 2/5/93 333,333 432,000
------------------------
500,000 702,000
------------------------
21
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-----------------------------------------------------------------------------------------------------------------------------
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 $449,196 11/30/95 $449,196 $457,731
10.5% Senior Secured Convertible Note due 2005, convertible
into common stock at $50,000 per share $195,000 11/30/95 195,000 212,901
Common Stock 6 shs. 11/30/95 337,500 223,670
------------------------
981,696 894,302
------------------------
PLASSEIN PACKAGING, INC.
A MANUFACTURER OF FLEXIBLE PACKAGING PRODUCTS.
-----------------------------------------------------------------------------------------------------------------------------
13% Senior Subordinated Note due 2007 $716,292 8/15/00 623,709 713,786
12% Junior Subordinated Note due 2008 $568,378 8/15/00 376,610 509,039
Convertible Preferred Stock, convertible into common stock at
$1 per share (B) 288,256 shs. 8/15/00 288,256 259,430
Common Stock (B) 446,960 shs. 8/15/00 289,553 260,578
Warrant, exercisable until 2008, to purchase common stock at
$.01 per share (B) 299,447 shs. 8/15/00 95,840 2,994
------------------------
1,673,968 1,745,827
------------------------
POLYMER TECHNOLOGIES,INC./POLI-TWINE WESTERN, INC.
A LEADING MANUFACTURER OF POLYPROPYLENE TWINE FOR THE HAY BAILING MARKETPLACE.
-----------------------------------------------------------------------------------------------------------------------------
11% Senior Subordinated Note due 2010 $1,806,250 3/1/00 1,711,218 1,781,143
10% Junior Subordinated Note due 2010 $239,062 3/1/00 239,062 210,853
Common Stock (B) 159,375 shs. 3/1/00 79,688 71,719
Warrant, exercisable until 2010, to purchase common stock at
$.01 per share (B) 159,000 shs. 3/1/00 103,541 1,590
------------------------
2,133,509 2,065,305
------------------------
PPI HOLDINGS COMPANY
A MANUFACTURER OF PLASTIC BOTTLES AND CLOSURES FOR THE NUTRITIONAL, PHARMACEUTICAL, PERSONAL CARE AND FOOD PACKAGING MARKETS.
-----------------------------------------------------------------------------------------------------------------------------
12%Senior Subordinated Note due 2008 $2,125,000 12/19/00 1,859,686 2,120,750
Membership Interests of MM/Lincap PPI Investments, Inc., LLC (B) 2.00%int. 12/21/00 265,625 212,500
------------------------
2,125,311 2,333,250
------------------------
22
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-----------------------------------------------------------------------------------------------------------------------------
PRECISION DYNAMICS, INC.
A MANUFACTURER OF CUSTOM-DESIGNED SOLENOID VALVES AND CONTROLS.
-----------------------------------------------------------------------------------------------------------------------------
Senior Secured Floating Rate Revolving Credit Facility
due 2003 $652,000 7/22/96 $652,000 $635,113
Senior Secured Floating Rate Term Note due 2003 $2,233,100 7/22/96 2,233,100 2,184,865
12% Senior Secured Term Note due 2004 $489,000 7/22/96 433,091 476,628
8% Preferred Stock 326 shs. 7/22/96 231,916 189,429
Common Stock (B) 599 shs. 7/22/96 28,978 14,489
Warrant, exercisable until 2004, to purchase common stock
at $.01 per share (B) 322 shs. 7/22/96 97,800 3
------------------------
3,676,885 3,500,527
------------------------
PROCESS CHEMICALS, LLC
A SPECIALTY CHEMICAL COMPANY THAT MANUFACTURES PROCESS CHEMICALS FOR THE FERTILIZER, ASPHALT AND CONCRETE INDUSTRIES.
-----------------------------------------------------------------------------------------------------------------------------
6% Redeemable Preferred Membership Interests 2,525 int. * 2,770,343 2,528,491
Common Membership Interests 9,863 int. * 13,049 237,114
------------------------
2,783,392 2,765,605
------------------------
*7/31/97 and 1/4/99
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 $520,000 8/12/94 520,000 312,000
9.8% Redeemable Exchangeable Preferred Stock 1,004 shs. 8/12/94 100,350 20,070
Common Stock (B) 1,492 shs. 8/12/94 -- --
------------------------
620,350 332,070
------------------------
PW EAGLE,INC. - O.T.C.
AN EXTRUDER OF SMALL AND MEDIUM DIAMETER PLASTIC PIPE AND TUBING IN THE UNITED STATES.
-----------------------------------------------------------------------------------------------------------------------------
14% Senior Subordinated Note due 2007 $3,383,328 9/16/99 3,383,328 3,635,724
Warrant, exercisable until 2007, to purchase common stock at
$.01 per share (B) 197,040 shs. 9/16/99 1 1,394,748
------------------------
3,383,329 5,030,472
------------------------
RENT-WAY,INC. - O.T.C.
AN OPERATOR OF 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
------------------------
SAFETY SPEED CUT MANUFACTURING A MANUFACTURER OF VERTICAL PANEL SAWS AND ROUTERS FOR THE WOOD WORKING INDUSTRY.
-----------------------------------------------------------------------------------------------------------------------------
Senior Secured Floating Rate Tranche A Note due 2007 $3,015,072 6/2/99 3,015,072 3,015,072
12% Senior Secured Tranche B Note Due 2007 $1,130,652 6/2/99 1,130,652 1,129,634
Class B common stock (B) 1,480 shs. 6/2/99 256,212 204,969
------------------------
4,401,936 4,349,675
------------------------
23
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-----------------------------------------------------------------------------------------------------------------------------
SMG HOLDINGS, INC.
A MANUFACTURER AND DISTRIBUTOR OF BRANDED MEAT PRODUCTS.
-----------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2008 $1,366,000 8/29/00 $1,136,933 $1,358,624
Limited Partnership Interests of MHD Holdings, LLC 1.69% int. 8/29/00 759,000 683,100
Warrant, exercisable until 2008, to purchase common stock at
$.01 per share (B) 5,565 shs. 8/29/00 233,738 56
------------------------
2,129,671 2,041,780
------------------------
SNYDER INDUSTRIES, INC.
A MANUFACTURER OF PROPRIETARY ROTATIONALLY MOLDED POLYETHYLENE CONTAINERS.
-----------------------------------------------------------------------------------------------------------------------------
12.5% Senior Subordinated Note due 2007 $3,125,000 12/6/99 2,730,700 3,120,625
Warrant, exercisable until 2007, to purchase common stock at
$.01 per share (B) 513 shs. 12/6/99 426,136 5
------------------------
3,156,836 3,120,630
------------------------
SPECTAGUARD ACQUISITION LLC
THE TENTH LARGEST PROVIDER OF SECURITY OFFICERS IN THE UNITED STATES.
-----------------------------------------------------------------------------------------------------------------------------
14% Senior Subordinated Note due 2008 $2,012,833 3/1/00 1,976,853 2,000,152
14% Preferred Stock 109 shs. 3/1/00 108,854 94,224
Common Stock (B) 100,179 shs. 3/1/00 14,844 11,871
Warrant, exercisable until 2008, to purchase common stock at
$.01 per share (B) 257,000 shs. 3/1/00 35,980 2,570
------------------------
2,136,531 2,108,817
------------------------
STAR INTERNATIONAL INC.
A MANUFACTURER OF COMMERCIAL COOKING APPLIANCES.
-----------------------------------------------------------------------------------------------------------------------------
11% Senior Secured Note due 2004 $2,670,650 1/25/00 2,532,165 2,602,815
9.65% Senior Secured Note due 2004 $938,508 5/27/94 938,507 903,407
10.5% Subordinated Note due 2004 $716,418 5/27/94 716,418 657,672
Common Stock (B) 4,310 shs. 5/27/94 259,735 60,289
Warrant, exercisable until 2004, to purchase common stock at
$.01 per share (B) 4,621 shs. * 171,830 64,602
------------------------
4,618,655 4,288,785
------------------------
* 5/24/94 and 1/25/00
STRATEGIC EQUIPMENT & SUPPLY PARTNERS, INC.
A PROVIDER OF KITCHEN AND RESTAURANT DESIGN, EQUIPMENT FABRICATION AND INSTALLATION SERVICES.
-----------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2008 $3,875,000 1/14/00 3,258,480 3,873,062
Warrant, exercisable until 2008, to purchase common stock at
$.01 per share (B) 30,290 shs. 1/14/00 658,750 303
------------------------
3,917,230 3,873,365
------------------------
24
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-----------------------------------------------------------------------------------------------------------------------------
SUPREME INDUSTRIES, INC. - A.S.E.
A MANUFACTURER OF MODULAR HOMES AND TRUCK BODIES.
-----------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 105,202 shs. * $267,325 $266,287
Common Stock of TGC Industries, Inc.(B) 6,361 shs. 9/30/86 9,497 5,069
------------------------
276,822 271,356
------------------------
* 5/23/79, 12/15/95 and 6/9/96
THE TRANZONIC COMPANIES A PRODUCER OF COMMERCIAL AND INDUSTRIAL SUPPLIES, SUCH AS SAFETY PRODUCTS, JANITORIAL SUPPLIES, WORK
APPAREL, WASHROOM AND RESTROOM SUPPLIES AND SANITARY CARE PRODUCTS.
-----------------------------------------------------------------------------------------------------------------------------
12.5% Senior Subordinated Note due 2007 $2,712,000 2/5/98 2,412,023 2,751,324
Common Stock (B) 630 shs. 2/4/98 630,000 567,000
Warrants, exercisable until 2006, to purchase shares of
Class B common stock at $.01 per share (B) 444 shs. 2/5/98 368,832 114,242
------------------------
3,410,855 3,432,566
------------------------
THERMA-TRU CORPORATION
A MANUFACTURER OF RESIDENTIAL EXTERIOR ENTRY DOOR SYSTEMS.
-----------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Note due 2009 $1,236,000 5/9/00 958,612 1,244,652
Limited Partnership Interest of KTHolding Company L.P.(B) 0.52% int. 5/5/00 772,700 695,430
Warrant, exercisable until 2009, to purchase common stock at
$.01 per share (B) 739 shs. 5/9/00 287,370 7
------------------------
2,018,682 1,940,089
------------------------
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 1,120,000 802,388
Warrant, exercisable until 2008, to purchase common stock at
$.01 per share (B) 474 shs. 7/25/96 48,216 339,406
------------------------
1,168,216 1,141,794
------------------------
TITAN CORPORATION
A PROVIDER OF INFORMATION TECHNOLOGY SERVICES, FOOD AND MEDICAL STERILIZATION SERVICES AND COMMUNICATIONS.
-----------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 54,384 shs. 8/31/95 173,221 883,740
------------------------
TRANSMONTAIGNE OIL COMPANY - A.S.E.
AN INDEPENDENT PETROLEUM PRODUCTS MARKETING COMPANY.
-----------------------------------------------------------------------------------------------------------------------------
Common Stock (B) 333,326 shs. * 1,109,177 824,982
------------------------
*3/28/91, 12/18/91, 9/30/92, 9/30/93, 9/30/94, 3/31/95 and 5/9/95.
25
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-----------------------------------------------------------------------------------------------------------------------------
TREND TECHNOLOGIES,INC.
A MANUFACTURER AND ASSEMBLER OF PLASTIC INJECTION MOLDED PARTS.
-----------------------------------------------------------------------------------------------------------------------------
Limited Partnership Interests of Riverside V
Holding Company L.P. 8.28% int. * 201,036 160,834
Limited Partnership Interests of Riverside V-A
Holding Company L.P. 8.28% int. * 548,964 411,743
------------------------
750,000 572,577
------------------------
* 3/21/97, 10/16/97, 11/19/97 and 3/12/99.
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 3,000,000 300,000
Common Stock (B) 71,429 shs. 4/17/98 500,003 --
Warrant, exercisable until 2005, to purchase common stock at
$2.03 per share (B) 218,182 shs. 5/26/98 1 --
------------------------
3,500,004 300,000
------------------------
TRONAIR,INC.
A DESIGNER, ENGINEER AND MANUFACTURER OF GROUND SUPPORT EQUIPMENT FOR THE BUSINESS, COMMUTER AND COMMERCIAL AVIATION MARKETS.
-----------------------------------------------------------------------------------------------------------------------------
10.5% Senior Secured Term Note due 2008 $2,368,750 1/20/00 2,368,750 2,309,294
12% Senior Subordinated Note due 2010 $1,326,500 1/20/00 1,233,070 1,295,725
Common Stock (B) 227,400 shs. 1/20/00 227,400 181,920
Warrant, exercisable until 2010, to purchase common stock at
$.01 per share (B) 260,563 shs. 1/20/00 98,540 2,606
------------------------
3,927,760 3,789,545
------------------------
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 2,406,343 2,650,657
Limited Partnership Interests (B) 10.00% int. 6/17/97 824,600 742,140
Warrant,exercisable until 2006, to purchase limited
partnership interests at $.01 per unit (B) 1,258 uts. 6/23/97 376,932 13
------------------------
3,607,875 3,392,810
------------------------
TVI, INC.
A RETAILER OF USED CLOTHING IN THE UNITED STATES, CANADA AND AUSTRALIA.
-----------------------------------------------------------------------------------------------------------------------------
15.971% Subordinated Note due 2008 $1,886,000 5/2/00 1,800,856 1,870,157
Common Stock (B) 354,167 shs. 5/2/00 354,167 318,750
------------------------
2,155,023 2,188,907
------------------------
26
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares,Units,
Warrants,
Ownership
CORPORATE RESTRICTED SECURITIES:(A) or Principal Acquisition Fair Value
(continued) Amount Date Cost At 12/31/00
-----------------------------------------------------------------------------------------------------------------------------
U.S. NETTING, INC.
A MANUFACTURER OF PLASTIC NETTING FOR A WIDE VARIETY OF INDUSTRIES.
-----------------------------------------------------------------------------------------------------------------------------
Senior Secured Revolving Credit Facility due 2005 $121,095 5/3/95 121,095 60,681
11% Senior Secured Note due 2005 $1,071,223 5/3/95 1,071,223 687,404
12% Subordinated Note due 2005 $652,050 5/3/95 630,959 377,341
Common Stock (B) 4,911 shs. 5/3/95 391,230 4,911
Warrant, exercisable until 2005, to purchase common stock at
$.01 per share (B) 2,795 shs. 5/3/95 35,923 28
------------------------
2,250,430 1,130,365
------------------------
USFLOW CORPORATION
A DISTRIBUTOR OF INDUSTRIAL PIPES, VALVES AND FITTINGS.
-----------------------------------------------------------------------------------------------------------------------------
12.5% Senior Subordinated Note due 2007 $3,463,000 12/14/99 3,035,428 3,461,268
Class B Common Stock (B) 664 shs. 12/14/99 664,200 597,780
Warrant, exercisable until 2007, to purchase common stock at
$.01 per share (B) 565 shs. 12/14/99 461,733 6
------------------------
4,161,361 4,059,054
------------------------
VICTORY VENTURES, LLC
AN ACQUIRER OF CONTROLLING OR SUBSTANTIAL INTERESTS IN OTHER ENTITIES.
-----------------------------------------------------------------------------------------------------------------------------
Series A Preferred Units (B) 11,270 uts. 12/2/96 27,267 22,540
------------------------
VITEX PACKAGING, INC.
A MANUFACTURER OF SPECIALTY PACKAGING, PRIMARILY ENVELOPES AND TAGS USED ON TEA BAGS.
-----------------------------------------------------------------------------------------------------------------------------
12% Subordinated Note due 2008 $2,045,265 12/18/00 1,878,075 2,030,948
Limited Partnership Interests of Riverside VI Holding
Company L.P. 4.80% int. * 351,309 281,043
Limited Partnership Interests of Riverside Capital
Appreciation Fund (B) 0.75% int. 12/18/00 79,735 63,805
Warrant, exercisable until 2008, to purchase common stock at
$.01 per share (B) 308 shs. ** 227,729 3
------------------------
2,536,848 2,375,799
------------------------
* 12/30/97 and 9/9/99
**1/2/98 and 12/18/00
WASHINGTON INVENTORY SERVICES, INC.
A PROVIDER OF PHYSICAL INVENTORY TAKING AND OTHER RELATED SERVICES TO RETAILERS.
-----------------------------------------------------------------------------------------------------------------------------
12.5% Senior Subordinated Note due 2008 $1,646,875 11/3/00 1,597,505 1,643,746
Senior Preferred Stock (B) 4,692 shs. 11/1/00 469,160 451,379
Class B Common Stock (B) 8,959 shs. 11/1/00 8,959 8,063
Warrant, exercisable until 2008, to purchase common stock
at $.01 per share (B) 3,980 shs. 11/3/00 49,804 40
-------------------------
2,125,428 2,103,228
-------------------------
TOTAL PRIVATE PLACEMENT INVESTMENTS 187,543,850 169,172,776
-------------------------
27
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares or
CORPORATE RESTRICTED SECURITIES:(A) Interest Due Principal Fair Value
(continued) Rate Date Amount Cost At 12/31/00
----------------------------------------------------------------------------------------------------------------------------
RULE 144 A SECURITIES -4.34%:(A)
BONDS -0.10%
Climachem, Inc. 10.750% 12/01/07 $175,000 168,000 52,938
Cuddy International Corp. 10.750 12/01/07 525,000 517,158 131,250
----------------------------------------------------------------------------------------------------------------------------
TOTAL BONDS $700,000 685,158 184,188
=========== ----------- -----------
CONVERTIBLE BONDS - 2.82%
Commscope, Inc. 4.000% 12/15/06 $250,000 250,000 182,645
Echostar Communications, Inc. 4.875 01/01/07 400,000 400,000 304,416
Home Depot Exchangable Trust 1.000 02/14/06 1,315,000 1,162,953 1,153,912
Hyperion Solutions Corp. 4.500 03/15/05 200,000 200,000 156,994
Sanmina Corporation 0.000 09/12/20 2,300,000 957,375 885,546
Telewest Finance 6.000 07/07/05 405,000 280,463 268,266
Transwitch Corporation 4.500 09/12/05 225,000 225,000 202,689
Triquint Semiconductor, Inc. 4.000 03/01/07 875,000 818,442 826,429
Viropharma, Inc. 6.000 03/01/07 215,000 147,282 63,963
Vitesse Semiconductor Corp. 4.000 03/15/05 1,215,000 908,500 970,687
----------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS $7,400,000 5,350,015 5,015,547
=========== ----------- -----------
CONVERTIBLE PREFERRED STOCK - 1.39%
Alliant Energy Resources, Inc. 26,740 1,707,746 1,480,701
D T Industries, Inc. 40,000 2,000,000 1,000,000
----------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK 3,707,746 2,480,701
----------- -----------
COMMON STOCK - 0.00%
Jordan Telecom Products (B) 70 14,000 1,785
----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK 14,000 1,785
----------- -----------
WARRANTS - 0.03%
Winsloew Escrow Corporation (B) 900 9 45,000
----------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS 9 45,000
----------- -----------
TOTAL RULE 144A SECURITIES 9,756,928 7,727,221
----------- -----------
TOTAL CORPORATE RESTRICTED SECURITIES 197,300,778 176,899,997
----------- -----------
28
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares or
Interest Due Principal Market Value
CORPORATE PUBLIC SECURITIES - 12.49%:(A) Rate Date Amount Cost At 12/31/00
--------------------------------------------------------------------------------------------------------------------------
BONDS - 3.96%
360 Networks, Inc. 12.000% 08/01/09 $ 1,200,000 $ 885,000 $ 894,000
Central Tractor 10.625 04/01/07 600,000 586,500 328,500
Derby Cycle Corp. 10.000 05/15/08 460,000 460,000 128,800
EV International, Inc. 11.000 03/15/07 1,000,000 600,000 550,000
GFSI, Inc. 9.625 03/01/07 145,000 120,838 108,750
Grove Worldwide 9.250 05/01/08 335,000 292,325 30,150
Haynes International, Inc. 11.625 09/01/04 640,000 577,000 448,000
Kevco, Inc. 10.375 12/01/07 275,000 151,250 46,750
LLS Corp. 11.625 08/01/09 500,000 445,000 403,750
MCMS, Inc. 9.750 03/01/08 600,000 600,000 390,000
MSX International, Inc. 11.375 01/15/08 250,000 245,125 220,000
Neff Corp. 10.250 06/01/08 230,000 227,687 101,200
Numatics, Inc. 9.625 04/01/08 820,000 790,175 508,400
Remington Products Co. 11.000 05/15/06 600,000 595,506 471,000
Sports Club Co. 11.375 03/15/06 600,000 582,000 519,750
United Refining Co. 10.750 06/15/07 1,365,000 1,365,000 873,600
Woods Equipment Co., Inc. 12.000 07/15/09 800,000 800,000 232,000
Winsloew Escrow Corp. 12.750 08/15/07 900,000 879,472 801,000
--------------------------------------------------------------------------------------------------------------------------
TOTAL BONDS $11,320,000 10,202,878 7,055,650
=========== ------------ ------------
COMMON STOCK - 4.72%
American Country Holdings Inc.(B) 101,397 760,886 215,469
Associated Materials, Inc. 43,240 497,673 686,435
Beacon Power Corp.(B) 65,000 390,000 650,000
Benson Petroleum, LTD.(B) 200,000 154,408 290,280
BP Prudhoe Bay Royalty Trust 9,980 116,002 123,503
Budget Group,Inc.(B) 95,456 1,996,621 202,844
Charles River Lab Int'l, Inc.(B) 6,500 104,000 177,938
Computer Horizons Corp.(B) 32,068 301,942 78,166
Convera Corp.(B) 38,950 1,427,284 691,362
Dreamlife, Inc.(B) 73,125 813,719 68,555
Florist Transworld Delivery, Inc.(B) 29,374 41,258 73,435
HCI Direct, Inc.(B) 1,000 - -
Interbrew (B) 24,375 711,872 852,231
Ixia (B) 13,000 169,000 297,375
Key 3 Media Group, Inc.(B) 81,300 492,678 990,844
Proton Energy Systems, Inc.(B) 26,000 328,859 273,000
Rent-Way, Inc.(B) 60,363 600,008 267,860
Swiss Army Brands, Inc.(B) 39,000 393,825 234,000
Tycom LTD (B) 32,500 1,040,000 727,187
Whitman Corp. 92,146 2,006,380 1,508,886
--------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK 12,346,415 8,409,370
------------ ------------
29
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Shares or
Interest Due Principal Market Value
CORPORATE PUBLIC SECURITIES:(A) Rate Date Amount Cost At 12/31/00
--------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS - 3.80%
Commscope, Inc. 4.000% 12/15/06 $ 105,000 $ 90,694 $ 76,711
Corning, Inc. 0.000 11/08/15 795,000 589,829 575,254
Cox Communications,Inc. 0.426 04/19/20 3,260,000 1,292,396 1,213,665
Cymer, Inc. 7.250 08/06/04 575,000 569,500 546,014
Cypress Semiconductor Corp. 4.000 02/01/05 210,000 210,000 164,581
Echostar Communications 4.875 01/01/07 1,000,000 805,000 761,040
Hyperion Solutions, Inc. 4.500 03/15/05 50,000 35,500 39,249
ITC/Deltacom, Inc. 4.500 05/15/06 1,300,000 630,500 567,125
Kellstorm Industries, Inc. 5.500 06/15/03 975,000 833,150 377,081
Nextel Communications 5.250 01/15/01 1,425,000 1,052,625 1,044,126
SCI Systems, Inc. 3.000 03/15/07 800,000 727,037 636,216
Sanmina Corp. 0.000 09/12/20 2,000,000 714,914 770,040
--------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS $12,495,000 7,551,145 6,771,102
=========== ------------ ------------
WARRANTS -0.01%
American Country Holdings, Inc.(B) 183,117 45,779 11,445
--------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS 45,779 11,445
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES 30,146,217 22,247,567
------------ ------------
Interest Due Principal Market Value
SHORT-TERM SECURITIES - 3.91%: Rate/Yield Date Amount Cost At 12/31/00
--------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 3.91%
Avnet, Inc. 8.019% 01/02/01 $2,975,000 $2,974,347 2,974,347
Countywide Home Loans, Inc. 6.742 01/03/01 1,000,000 999,631 999,631
National Fuel Gas Co. 6.665 01/18/01 3,000,000 2,990,721 2,990,721
--------------------------------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES $6,975,000 6,964,699 6,964,699
---------- ------------ ------------
TOTAL INVESTMENTS 115.71% $234,411,694 $206,112,263
============ ------------
Other Assets 3.88 6,920,470
Liabilities (19.59) (34,902,236)
--------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS 100.00% $178,130,497
==========================================================================================================================
(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
30
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Fair Value
CORPORATE RESTRICTED SECURITIES At 12/31/00
--------------------------------------------------------------------------------
AUTOMOBILE - 4.37%
America's Body Co./LCP Holding Co. $ 3,911,743
LIH Investors,L.P. 3,877,901
--------------------------------------------------------------------------------
7,789,644
--------------------------------------------------------------------------------
BEVERAGE, FOOD
&TOBACCO -2.22%
Beta Brands, Inc. 1,811,730
Cains Foods, L.P. 93,784
SMG Holdings, Inc. 2,041,780
--------------------------------------------------------------------------------
3,947,294
--------------------------------------------------------------------------------
BROADCASTING
& ENTERTAINMENT - 0.17%
Echostar Communications, Inc. 304,416
--------------------------------------------------------------------------------
BUILDINGS &REAL ESTATE - 6.48%
Adorn,Inc. 2,072,516
Strategic Equipment & Supply Partners, Inc 3,873,365
Supreme Industries, Inc. 271,356
Therma-Tru Corporation 1,940,089
Truseal Technologies,Inc. 3,392,810
--------------------------------------------------------------------------------
11,550,136
--------------------------------------------------------------------------------
CARGO TRANSPORT - 0.64%
Tidewater Holdings, Inc. 1,141,794
--------------------------------------------------------------------------------
CHEMICAL,PLASTICS
& RUBBER -2.51%
Process Chemicals, LLC 2,765,605
Trend Technologies, Inc. 572,577
U.S.Netting, Inc. 1,130,365
--------------------------------------------------------------------------------
4,468,547
--------------------------------------------------------------------------------
CONSUMER PRODUCTS - 10.71%
Alpha Shirt Company 4,181,352
Colibri Holdings Corporation 2,037,453
Consumer Product Enterprises, Inc. 1,460,822
Corvest Promotional Products, Inc. 4,037,635
G C-Sun Holdings, LP 1,713,624
Keepsake Quilting, Inc. 2,221,259
The Tranzonic Companies 3,432,566
--------------------------------------------------------------------------------
19,084,711
--------------------------------------------------------------------------------
CONTAINERS, PACKAGING
& GLASS - 5.80%
C & K Manufacturing and Sales Company 673,748
Capitol Specialty Plastics, Inc. 403
Fleming Acquisition Corporation 80,349
Plassein Packaging, Inc. 1,745,827
PPI Holdings Company 2,333,250
Snyder Industries, Inc. 3,120,630
Vitex Packaging, Inc. 2,375,799
--------------------------------------------------------------------------------
10,330,006
--------------------------------------------------------------------------------
DIVERSIFIED/CONGLOMERATE,
MANUFACTURING - 14.98%
Commscope, Inc. 182,645
D T Industries, Inc. 1,000,000
Evans Consoles, Inc. 3,225,500
Highgate Capital, LLC 700,000
Hussey Seating Company 3,302,440
Jackson Products, Inc. 998,585
Jason, Inc. 2,086,879
Maxtec International Corp. 669,117
NPC, Inc. 4,437,639
PAR Acquisition Corp. 702,000
PW Eagle, Inc. 5,030,472
Safety Speed Cut Manufacturing 4,349,675
--------------------------------------------------------------------------------
26,684,952
--------------------------------------------------------------------------------
DIVERSIFIED/CONGLOMERATE,
SERVICE - 10.58%
Diversco, Inc./DHI Holdings, Inc. 2,477,581
Examination Management Services, Inc. 4,037,250
Hamilton Funeral Services 2,219,365
Lancaster Laboratories, Inc. 2,064,819
Magnetic Data Technologies, Inc./
MDT Holdings LLC 2,063,308
Pharmaceutical Buyers, Inc. 894,302
SpectaGuard Acquisition LLC 2,108,817
Titan Corporation 883,740
Washington Inventory Services, Inc. 2,103,228
--------------------------------------------------------------------------------
18,852,410
--------------------------------------------------------------------------------
31
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2000
Fair Value
CORPORATE RESTRICTED SECURITIES At 12/31/00
--------------------------------------------------------------------------------
ELECTRONICS - 6.95%
Directed Electronics, Inc. $ 4,121,132
Hyperion Solutions Corp. 156,994
Integration Technology Systems, Inc. 2,383,692
Precision Dynamics, Inc. 3,500,527
Sanmina Corporation 885,546
Transwitch Corporation 202,689
Tridex Corp. 300,000
Triquint Semiconductor, Inc. 826,429
--------------------------------------------------------------------------------
12,377,009
--------------------------------------------------------------------------------
FARMING & AGRICULTURE - 1.42%
Cuddy International Corp. 131,250
Polymer Technologies, Inc./
Poli-Twine Western, Inc. 2,065,305
Protein Genetics, Inc. 332,070
--------------------------------------------------------------------------------
2,528,625
--------------------------------------------------------------------------------
FINANCE - 0.15%
Telewest Finance 268,266
--------------------------------------------------------------------------------
HEALTHCARE, EDUCATION
& CHILDCARE - 5.12%
D&K Healthcare Resources, Inc. 3,169,426
Enzymatic Therapy, Inc. 2,060,086
Nexell Therapeutics 3,830,123
Viropharma, Inc. 63,963
--------------------------------------------------------------------------------
9,123,598
--------------------------------------------------------------------------------
HOME & OFFICE FURNISHINGS,
HOUSEWARES, AND DURABLE
CONSUMER PRODUCTS - 5.91%
Fasteners for Retail, Inc. 4,263,596
Moss, Inc. 1,978,456
Star International Holdings, Inc. 4,288,785
--------------------------------------------------------------------------------
10,530,837
--------------------------------------------------------------------------------
LEISURE, AMUSEMENT,
ENTERTAINMENT - 3.58%
Adventure Entertainment Corporation 601,073
Merit Industries, Inc. 1,742,507
Olympic Boat Centers, Inc. 4,037,356
--------------------------------------------------------------------------------
6,380,936
--------------------------------------------------------------------------------
MINING, STEEL, IRON &
NON PRECIOUS METALS - 1.31%
Better Minerals & Aggregates $ 2,326,716
MISCELLANEOUS -2.43%
CapeSuccess LLC 105,196
Climachem, Inc. 52,938
Immedient Corporation 33,932
USFlow Corporation 4,059,054
Victory Ventures, LLC 22,540
Winsloew Escrow Corporation 45,000
--------------------------------------------------------------------------------
4,318,660
--------------------------------------------------------------------------------
OIL AND GAS -4.48%
Chaparral Resources, Inc. 535
Golden Bear Oil Specialties 343,480
Hanover Compressor Company 4,935,471
Louis Dreyfus Natural Gas Corporation 1,876,185
TransMontaigne Oil Company 824,982
--------------------------------------------------------------------------------
7,980,653
--------------------------------------------------------------------------------
PERSONAL TRANSPORTATION - 2.13%
Tronair, Inc. 3,789,545
--------------------------------------------------------------------------------
RETAIL STORES - 4.52%
A T I Acquisition Corporation 4,713,021
Home Depot Exchangable Trust 1,153,912
Rent-Way, Inc. 200
TVI, Inc. 2,188,907
--------------------------------------------------------------------------------
8,056,040
--------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.55%
Jordan Telecom Products 1,785
Vitesse Semiconductor Corp. 970,687
--------------------------------------------------------------------------------
972,472
--------------------------------------------------------------------------------
TEXTILES - 1.47%
Kappler Safety Group, Inc. 2,612,029
--------------------------------------------------------------------------------
UTILITIES -0.83%
Alliant Energy Resources, Inc. 1,480,701
--------------------------------------------------------------------------------
TOTAL CORPORATE
RESTRICTED SECURITIES - 99.31% $176,899,997
================================================================================
32
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
1. HISTORY
MassMutual Corporate Investors (the "Trust") is a closedend, non-diversified
investment company. David L. Babson & Company Inc.("Babson") acts as its
investment adviser.
The Trust commenced operations in 1971 as a Delaware corporation. Pursuant to an
Agreement and Plan of Reorganization dated November 14, 1985, approved by
shareholders, the Trust was organized as a Massachusetts business trust under
the laws of the Commonwealth of Massachusetts, effective November 28, 1985.
On January 27, 1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary ("MMCI Subsidiary Trust") for the purpose of holding
certain investments. The results of MMCI Subsidiary Trust have been consolidated
in the accompanying financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of the financial statements in
conformity with accounting principles generally accepted in the United States of
America.
A. VALUATION OF INVESTMENTS:
Valuation of a security in the Trust's portfolio is made on the basis of market
price whenever market quotations are readily available and all securities of the
same class held by the Trust can be readily sold in such market.
Nearly all securities which are acquired by the Trust directly from the issuers
and shares into which such securities may be converted or which may be purchased
on the exercise of warrants attached to such securities will be subject to legal
or contractual delays in or restrictions on resale and will therefore be
"restricted securities". Generally speaking, as contrasted with open-market
sales of unrestricted securities which may be effected immediately if the market
is adequate, restricted securities can be sold only in a directly negotiated
transaction to a limited number of purchasers or in a public offering for which
a registration statement is in effect under the Securities Act of 1933.
The value of restricted securities, and of any other assets for which there are
no reliable market quotations, is the fair value as determined in good faith by
the Board of Trustees of the Trust (the "Trustees"). Each restricted security is
valued by the Trustees at the time of the acquisition thereof and at least
quarterly thereafter. The Trustees have established guidelines to aid in the
valuation of each security. Generally, restricted securities are initially
valued at cost 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
Babson. In making valuations, the Trustees will consider reports by Babson
analyzing each portfolio security in accordance with the relevant factors
referred to above.Babson has agreed to provide such reports to the Trust at
least quarterly.
The financial statements include restricted securities valued at $176,899,997
(99.31% of net assets) as of December 31,2000 ($174,084,140 at December 31,
1999) 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, 2000, subject to discount where appropriate, and are approved by
the Trustees.
Short-term securities with more than sixty days to maturity are valued at fair
value and short-term securities having a maturity of sixty days or less are
valued at amortized cost which approximates market value.
B.ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. The 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.
33
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
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.
E. RECLASSIFICATIONS:
Certain amounts from prior years' financial statements have been reclassed to
conform with current year presentation.
3. MANAGEMENT FEE
Under an investment services contract,Babson has agreed to invest for MassMutual
Life Insurance Company's ("MassMutual") general account concurrently with the
Trust in each restricted security purchased by the Trust. Babson, in addition to
originating and sharing in the purchase of such securities, represents the Trust
in any negotiations with issuers, investment banking firms, securities brokers
or dealers and other institutions or investors relating to the Trust's
investments. Babson provides a continuing review of the investment operations of
the Trust. Babson also provides the Trust with office space and office
equipment, 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
Babson a quarterly base rate (the "Base Fee Rate") of 5/16 of 1% of the value of
the Trust's net assets as of the end of each fiscal quarter, approximately
equivalent to 1.25% of the net asset value of the Trust on an annual basis, plus
or minus a quarterly performance adjustment (the "Performance Adjustment") of up
to 1/16 of 1% approximately equivalent to .25% on an annual basis.
The Performance Adjustment is based on the Trust's performance as compared to a
benchmark rate of return (the "Target Rate") equal to 5.0 percentage points plus
an unweighted, arithmetic average of the rates of return on the Standard &
Poor's Industrial Stock Price Index and the Lehman Brothers Intermediate
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, 2000 was:
PERFORMANCE
ADJUSTMENT AMOUNT
--------------------------------------------------------------------------------
March 31,2000 (0.0625%) ($128,204)
June 30,2000 0.0625% 132,603
September 30,2000 (0.0625%) (126,330)
December 31,2000 0.0215% 38,436
--------------------------------------------------------------------------------
Total (0.0410%) ($83,495)
4. SENIOR SECURED INDEBTEDNESS
A. 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.
In agreement with MassMutual, the Note's maturity has been extended for an
additional seven years from November 15, 2000. The Note is due November 15, 2007
and will accrue at 7.39% per annum. For each of the periods ended December 31,
2000 and 1999, the Trust incurred total interest expense on the Note of
$1,117,500 and $1,066,000, respectively.
B. REVOLVING CREDIT AGREEMENT
The Trust entered into a senior unsecured,floating rate, revolving credit
agreement (the "Revolver") with Fleet National Bank (the "Agent Bank") as of
June 29, 2000 in the principal amount of $25,000,000, maturing on May 31, 2005.
The interest rate on the outstanding revolving loan is determined for periods of
one, three or six months (as selected by the Trust) and is set at an annual rate
equal to LIBOR (London Interbank Offered Rate) plus 0.37%. The Trust also agreed
to pay an up-front fee equal to 0.10% on the total commitment. The facility fee
is 0.15% per annum of the total commitment.
As of December 31, 2000, there were no outstanding loans drawn against the
revolving credit facility. For the period ended December 31, 2000, the Trust
incurred $19,007 in expense related to the undrawn portion.
34
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS.
December 31, 2000 and 1999
5. PURCHASES AND SALES OF INVESTMENTS
For the year For the year
ended 12/31/2000 ended 12/31/1999
--------------------------------------------------------------------------------
COST OF INVESTMENTS ACQUIRED
--------------------------------------------------------------------------------
Corporate restricted securities $88,296,838 $99,390,409
Corporate public securities 37,405,876 46,963,001
Short-term securities 607,186,552 579,219,495
--------------------------------------------------------------------------------
PROCEEDS FROM SALES OR MATURITIES
--------------------------------------------------------------------------------
Corporate restricted securities $84,582,425 $78,805,361
Corporate public securities 51,516,754 76,316,355
Short-term securities 614,777,319 573,738,039
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of December 31, 2000. The net unrealized
depreciation of investments for financial reporting and federal tax purposes as
of December 31, 2000 is $28,299,431 and consists of $21,201,697 appreciation and
$49,501,128 depreciation.
The aggregate cost of investments was 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.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
Amount Per Share Amount Per Share
--------------------------------------------------------------------------------
MARCH 31, 2000 MARCH 31, 1999
--------------------------------------------------------------------------------
Investment income $4,958,909 $4,710,746
Net investment income 4,063,971 $0.47 3,808,088 $0.44
Net realized and unrealized
gain (loss)on investments 11,553,274 1.35 (7,968,093) (0.93)
--------------------------------------------------------------------------------
JUNE 30, 2000 JUNE 30, 1999
--------------------------------------------------------------------------------
Investment income 5,365,267 4,762,468
Net investment income 4,211,896 0.49 3,856,236 0.45
Net realized and unrealized
gain on investments 6,468,569 0.76 7,903,688 0.92
--------------------------------------------------------------------------------
SEPTEMBER 30,2000 SEPTEMBER 30,1999
--------------------------------------------------------------------------------
Investment income 5,271,922 5,094,589
Net investment income 4,260,988 0.50 4,072,977 0.47
Net realized and unrealized
loss on investments (9,996,453) (1.17) (5,083,113) (0.59)
--------------------------------------------------------------------------------
DECEMBER 31,2000 DECEMBER 31,1999
--------------------------------------------------------------------------------
Investment income 5,315,898 4,562,018
Net investment income 4,331,989 0.50 3,698,382 0.44
Net realized and unrealized
loss on investments (12,023,011) (1.40) (2,902,947) (0.34)
35
[PHOTOS OF MEMBERS OF THE BOARD OF TRUSTEES APPEAR HERE]
MEMBERS OF THE
BOARD OF TRUSTEES
STUART H. REESE
Executive Vice President and
Chief Investment Officer,
Massachusetts Mutual Life
Insurance Company
RICHARD G. DOOLEY
Retired Executive
Vice President and
Chief Investment Officer,
Massachusetts Mutual Life
Insurance Company
MILTON COOPER
Chairman,
Kimco Realty Corp.
CORINE T. NORGAARD*
Dean, Barney School
of Business and
Public Administration,
University of Hartford
JACK A. LAUGHERY
Chairman,
Laughery Investments
DONALD GLICKMAN
Chairman,
Donald Glickman
& Company, Inc.
MARTIN T. HART*
President and Director,
H Corporation
DONALD E. BENSON*
Executive Vice President
and Director,
Marquette Bancshares, Inc.
*Member of Audit Committee
--------------------------------------------------------------------------------
Independent Auditors' Report
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF MASSMUTUAL CORPORATE INVESTORS
We have audited the accompanying consolidated statements of assets and
liabilities of MassMutual Corporate Investors (the "Trust"), including the
consolidated schedule of investments, as of December 31, 2000 and 1999, and the
related consolidated statements of operations, cash flows, changes in net
assets, and the consolidated financial highlights for the years 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 audits. The financial
highlights for the year ended December 31, 1998 and for each year of the years
in the eight-year period then ended were audited by other auditors, whose
report, dated February 25, 1999 expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 verification of securities owned as of December 31, 2000 by counting of
securities at the custodian and confirmation of securities owned as of December
31, 2000 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 audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements and consolidated financial
highlights referred to above present fairly, in all material respects, the
financial position of the Trust as of December 31, 2000 and 1999, and the
results of its operations, its cash flows, its changes in net assets, and
financial highlights for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 9, 2001.
36
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
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
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 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
MassMutual Corporate Investors
1295 State Street
Springfield, Massachusetts 01111-0001
(413) 744-8480 www.massmutual.com/mci
Adviser
David L. Babson & Company Inc.
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
MCI
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