Edgar Filing: BABSON CAPITAL PARTICIPATION INVESTORS

mmpiform-nq_17817.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-Q

Quarterly Schedule of Portfolio Holdings of

Registered Management Investment Company

Investment Company Act file number 811-05531

Babson Capital Participation Investors

(Exact name of registrant as specified in charter)

1500 Main Street, Springfield, MA 01115

(Address of principal executive offices) (Zip code)

Christopher A. DeFrancis, Vice President, Secretary and Chief Legal Officer

1500 Main Street, Suite 2800, Springfield, MA 01115

(Name and address of agent for service)

Registrant's telephone number, including area code: 413-226-1000

___________________

Date of fiscal year end: 12/31

___________________

Date of reporting period: 03/31/15

___________________

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2015

(Unaudited)

Corporate Restricted Securities - 77.17%: (A)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Private Placement Investments - 61.32%
1492 Acquisition LLC
A leading producer of premium Italian cured meats and deli meats in the U.S.
14% Senior Subordinated Note due 10/17/2019	$	680,877	10/17/12	$	670,806	$	671,900
Limited Liability Company Unit Class A Common (B)	11,364 uts.		10/17/12		11,364		—
Limited Liability Company Unit Class A Preferred (B)	102 uts.		10/17/12		102,270		83,636
					784,440		755,536
A S C Group, Inc.
A designer and manufacturer of high reliability encryption equipment, communications products, computing systems and electronic components primarily for the military and aerospace sectors.
14% Senior Subordinated Note due 12/21/2020	$	1,049,256	12/20/13		1,031,204		1,059,749
Limited Liability Company Unit Class A (B)	3,094 uts.		*		153,704		310,149
Limited Liability Company Unit Class B (B)	1,479 uts.		10/09/09		52,999		148,258
* 10/09/09 and 12/20/13.					1,237,907		1,518,156

A W X Holdings Corporation
A provider of aerial equipment rental, sales and repair services to non-residential construction and maintenance contractors operating in the State of Indiana.
10.5% Senior Secured Term Note due 05/15/2015 (D)	$	420,000	05/15/08		413,944		210,000
13% Senior Subordinated Note due 05/15/2015 (D)	$	420,000	05/15/08		384,627		—
Common Stock (B)	60,000 shs.		05/15/08		60,000		—
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B)	21,099 shs.		05/15/08		35,654		—
					894,225		210,000
ABC Industries, Inc.
A manufacturer of mine and tunneling ventilation products in the U.S.
13% Senior Subordinated Note due 07/31/2019	$	181,818	08/01/12		167,780		183,636
Preferred Stock Series A (B)	125,000 shs.		08/01/12		125,000		267,789
Warrant, exercisable until 2022, to purchase
common stock at $.02 per share (B)	22,414 shs.		08/01/12		42,446		45,820
					335,226		497,245
ACP Cascade Holdings LLC
A manufacturer and distributor of vinyl windows and patio doors throughout the northwestern United States.
Limited Liability Company Unit Class B (B)		32 uts.	11/09/12		—		—

Advanced Manufacturing Enterprises LLC
A designer and manufacturer of large, custom gearing products for a number of critical customer applications.
14% Senior Subordinated Note due 12/07/2018	$	1,134,615	12/07/12		1,122,532		1,145,961
Limited Liability Company Unit (B)	1,431 uts.		*		143,077		200,983
* 12/07/12 and 07/11/13.					1,265,609		1,346,944

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Advanced Technologies Holdings
A provider of factory maintenance services to industrial companies.
Preferred Stock Series A (B)	332 shs.		12/27/07	$	164,016	$	504,839
Convertible Preferred Stock Series B (B)	28 shs.		01/04/11		21,600		42,327
					185,616		547,166
AFC - Dell Holding Corporation
A distributor and provider of inventory management services for “C-Parts” used by OEMs in their manufacturing and production facilities.
12.5% Senior Subordinated Note due 09/27/2020	$	1,181,250	03/27/15		1,157,666		1,180,785
Preferred Stock (B)	1,122 shs.		03/27/15		112,154		106,546
Common Stock (B)	346 shs.		03/27/15		346		329
					1,270,166		1,287,660
Airxcel Holdings
A leading manufacturer of a broad range of climate control solutions, including air-conditioners, heat pumps, cooking appliances, furnaces, powered vents, and water heaters.
12.5% Senior Subordinated Note due 11/18/2020	$	1,444,973	11/18/14		1,417,444		1,467,174
Limited Liability Company Unit	288 uts.		11/18/14		288,000		288,414
					1,705,444		1,755,588
American Hospice Management Holding LLC
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 03/31/2020 (D)	$	1,237,502	*		1,237,364		1,237,502
Preferred Class A Unit (B)	1,706 uts.		**		170,600		—
Preferred Class B Unit (B)	808 uts.		06/09/08		80,789		82,044
Common Class B Unit (B)	16,100 uts.		01/22/04		1		—
Common Class D Unit (B)	3,690 uts.		09/12/06		—		—
* 01/22/04 and 06/09/08.					1,488,754		1,319,546
** 01/22/04 and 09/16/06.

AMS Holding LLC
A leading multi-channel direct marketer of high-value collectible coins and proprietary-branded jewelry and watches.
Limited Liability Company Unit Class A Preferred (B)	114 uts.		10/04/12		113,636		344,334

Animal Supply Company
A distributor of pet products to independent pet stores, veterinary clients and other pet specialty retailers.
9.5% Senior Subordinated Note due 09/05/2019	$	1,725,000	03/30/15		1,699,156		1,698,894

Arch Global Precision LLC
A leading manufacturer of high tolerance precision components and consumable tools.
Limited Liability Company Unit Class B (B)	20 uts.		12/21/11		28,418		96,609
Limited Liability Company Unit Class C (B)	230 uts.		12/21/11		221,582		962,404
					250,000		1,059,013

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

ARI Holding Corporation
A leading national supplier of products used primarily by specialty contractors.
11.5% Senior Subordinated Note due 02/01/2020	$	1,698,197	*	$	1,673,777	$	1,718,850
Limited Partnership Interest	524 uts.		08/01/14		523,950		505,751
* 05/21/13 and 08/01/14.					2,197,727		2,224,601

Arrow Tru-Line Holdings, Inc.
A manufacturer of hardware for residential and commercial overhead garage doors in North America.
Preferred Stock (B)	27 shs.		10/16/09		26,825		105,183
Common Stock (B)	213 shs.		05/18/05		212,588		64,387
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B)	56 shs.		05/18/05		47,929		16,880
					287,342		186,450
Avantech Testing Services LLC
A manufacturer of custom Non-Destructive Testing (“NDT”) systems and provider of NDT and inspections services primarily to the oil country tubular goods market.
15% Senior Subordinated Note due 07/31/2021	$	505,280	07/31/14		496,232		437,022
Limited Liability Company Unit	36,964 uts.		07/31/14		369,643		335,394
					865,875		772,416
Blue Wave Products, Inc.
A distributor of pool supplies.
10% Senior Secured Term Note due 09/30/2018	$	278,014	10/12/12		274,359		278,014
13% Senior Subordinated Note due 09/30/2019	$	325,673	10/12/12		307,992		332,187
Common Stock (B)	51,064 shs.		10/12/12		51,064		130,718
Warrant, exercisable until 2022, to purchase
common stock at $.01 per share (B)	20,216 shs.		10/12/12		20,216		51,751
					653,631		792,670
BP SCI LLC
A leading value-added distributor of branded pipes, valves, and fittings (PVF) to diversified end markets.
Limited Liability Company Unit Class A (B)	417 uts.		10/17/12		41,667		264,417
Limited Liability Company Unit Class B (B)	167 uts.		10/17/12		166,666		217,112
					208,333		481,529

Bravo Sports Holding Corporation
A designer and marketer of niche branded consumer products including canopies, trampolines, in-line skates, skateboards, and urethane wheels.
12.5% Senior Subordinated Note due 06/30/2015	$	1,207,902	06/30/06		1,205,503		1,207,902
Preferred Stock Class A (B)	465 shs.		06/30/06		141,946		—
Common Stock (B)	1 sh.		06/30/06		152		—
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B)	164 shs.		06/30/06		48,760		—
					1,396,361		1,207,902

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

CG Holdings Manufacturing Company
A coating provider serving the automotive, agricultural, heavy truck and other end markets.
13% Senior Subordinated Note due 11/01/2019	$	1,412,605	*	$	1,344,932	$	1,446,895
Preferred Stock (B)	1,350 shs.		*		134,972		148,279
Preferred Stock (B)	489 shs.		*		48,721		53,743
Common Stock (B)	140 shs.		*		14,864		49,629
Warrant, exercisable until 2023, to purchase
common stock at $.01 per share (B)	58 shs.		*		5,430		20,614
* 05/09/13 and 11/01/13.					1,548,919		1,719,160

CHG Alternative Education Holding Company
A leading provider of publicly-funded, for profit pre-K-12 education services targeting special needs children at therapeutic day schools and “at risk” youth through alternative education programs.
13.5% Senior Subordinated Note due 01/19/2018	$	759,373	01/19/11		736,969		759,373
14% Senior Subordinated Note due 08/03/2019	$	197,855	08/03/12		195,122		199,834
Common Stock (B)	375 shs.		01/19/11		37,500		53,958
Warrant, exercisable until 2021, to purchase
common stock at $.01 per share (B)	295 shs.		01/19/11		29,250		42,414
					998,841		1,055,579
Church Services Holding Company
A provider of diversified residential services to homeowners in the Houston, Dallas, and Austin markets.
14.5% Senior Subordinated Note due 03/26/2018	$	424,765	03/26/12		416,456		424,765
10% Senior Subordinated Note due 09/12/2015	$	6,330	09/15/14		6,330		6,341
Common Stock (B)	1,327 shs.		*		132,700		114,137
Warrant, exercisable until 2022, to purchase
common stock at $.01 per share (B)	57 shs.		03/26/12		5,740		4,903
* 03/26/12, 05/25/12 and 06/19/12.					561,226		550,146

Clarion Brands Holding Corp.
A portfolio of six over-the-counter (OTC) pharmaceutical brands whose products are used to treat tinnitus or ringing of the ear, excessive sweating, urinary tract infections, muscle pain, and skin conditions.
12.5% Senior Subordinated Note due 09/31/2021	$	1,579,965	10/01/14		1,550,043		1,597,245
Common Stock (B)	1,568 shs.		10/01/14		156,818		101,933
					1,706,861		1,699,178
Clough, Harbour and Associates
An engineering service firm that is located in Albany, NY.
Preferred Stock (B)	147 shs.		12/02/08		146,594		386,035

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Compass Chemical International LLC
A manufacturer and supplier of standard and specialty formulated chemicals, primarily phosphoric acid derivatives called phosphonates.
13% Senior Subordinated Note due 10/04/2020	$	1,497,159	03/04/15	$	1,467,337	$	1,505,930
Limited Liability Company Unit (B)	230 uts.		03/04/15		230,000		218,500
					1,697,337		1,724,430
Connecticut Electric, Inc.
A supplier and distributor of electrical products sold into the retail and wholesale markets.
Limited Liability Company Unit Class A (B)	82,613 uts.		01/12/07		82,613		75,779
Limited Liability Company Unit Class C (B)	59,756 uts.		01/12/07		59,756		58,740
Limited Liability Company Unit Class D (B)	671,525 uts.		05/03/10		—		764,819
Limited Liability Company Unit Class E (B)	1,102 uts.		05/03/10		—		—
					142,369		899,338
Crane Rental Corporation
A crane rental company since 1960, headquartered in Florida.
13% Senior Subordinated Note due 11/30/2015	$	695,250	08/21/08		685,923		695,250
Common Stock (B)	135,000 shs.		08/21/08		135,000		131,042
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B)	72,037 shs.		08/21/08		103,143		69,925
					924,066		896,217
CTM Holding, Inc.
A leading owner and operator of coin-operated children’s rides, penny presses and candy kiosks in the U.S.
15% Senior Subordinated Note due 11/22/2019	$	1,230,793	11/22/13		1,210,799		1,255,409
Common Stock (B)	31,044 shs.		11/22/13		443,182		351,092
					1,653,981		1,606,501
Custom Engineered Wheels, Inc.
A manufacturer of custom engineered, non-pneumatic plastic wheels and plastic tread cap tires used primarily for lawn and garden products and wheelchairs.
Preferred Stock PIK (B)	156 shs.		10/26/09		156,468		180,421
Preferred Stock Series A (B)	114 shs.		10/27/09		104,374		131,819
Common Stock (B)	38 shs.		10/26/09		38,244		—
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B)	28 shs.		10/27/09		25,735		—
					324,821		312,240
DPL Holding Corporation
A distributor and manufacturer of aftermarket undercarriage parts for medium and heavy duty trucks and trailers.
14% Senior Subordinated Note due 05/04/2019	$	1,355,790	05/04/12		1,337,839		1,369,348
Preferred Stock (B)	25 shs.		05/04/12		252,434		299,750
Common Stock (B)	25 shs.		05/04/12		28,048		141,682
					1,618,321		1,810,780

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Dunn Paper
A provider of specialty paper for niche product applications.
11.25% Senior Subordinated Note due 06/30/2020	$	1,463,636	12/30/14	$	1,435,350	$	1,476,340
Preferred Stock (B)	261 shs.		12/30/14		261,364		248,292
					1,696,714		1,724,632
E S P Holdco, Inc.
A manufacturer of power protection technology for commercial office equipment, primarily supplying the office equipment dealer network.
Common Stock (B)	349 shs.		01/08/08		174,701		348,365

Eatem Holding Company
A developer and manufacturer of savory flavor systems for soups, sauces, gravies, and other products produced by food manufacturers for retail and foodservice end products.
Common Stock (B)	50 shs.		02/01/10		50,000		92,355
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	119 shs.		02/01/10		107,100		220,211
					157,100		312,566
ECG Consulting Group
A healthcare management consulting company who provides strategic, financial, operational, and technology related consulting services to healthcare providers.
11.75% Senior Subordinated Note due 11/21/2020	$	1,297,229	11/19/14		1,268,999		1,315,413
Limited Liability Company Unit (B)	230 uts.		11/19/14		71,875		63,514
					1,340,874		1,378,927
EPM Holding Company
A provider of non-discretionary regulatory driven engineering services that support mission critical safety and operational aspects of nuclear power plants.
14.5% Senior Subordinated Note due 07/26/2019	$	441,985	07/26/13		434,941		450,824
Common Stock (B)	1,535 shs.		07/26/13		153,474		237,819
					588,415		688,643
ERG Holding Company LLC
A provider of inpatient and outpatient clinical trial services to pharmaceutical companies and contract research organizations.
13.5% Senior Subordinated Note due 10/04/2019	$	944,278	04/04/14		928,071		945,855
Common Stock (B)	31 shs.		04/04/14		77,533		77,525
					1,005,604		1,023,380
F F C Holding Corporation
A leading U.S. manufacturer of private label frozen novelty and ice cream products.
Limited Liability Company Unit Preferred (B)	171 uts.		09/27/10		58,345		68,601
Limited Liability Company Unit (B)	171 uts.		09/27/10		17,073		146,331
					75,418		214,932

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

F G I Equity LLC
A manufacturer of a broad range of filters and related products that are used in commercial, light industrial, healthcare, gas turbine, nuclear, laboratory, clean room, hotel, educational system, and food processing settings.
Limited Liability Company Unit (B)	80,559 uts.		04/15/14	$	—	$	80,559
Limited Liability Company Unit Class B-1 (B)	65,789 uts.		12/15/10		65,789		117,250
Limited Liability Company Unit Class B-2 (B)	8,248 uts.		12/15/10		8,248		14,700
Limited Liability Company Unit Class B-3 (B)	6,522 uts.		08/30/12		15,000		13,234
Limited Liability Company Unit Class C (B)	1,575 uts.		12/20/10		16,009		24,288
					105,046		250,031
G C Holdings
A leading manufacturer of gaming tickets, industrial recording charts, security-enabled point-of sale receipts, and medical charts and supplies.
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	198 shs.		10/19/10		46,958		134,128

GD Dental Services LLC
A provider of convenient “onestop” general, specialty, and cosmetic dental services with 21 offices located throughout South and Central Florida.
Limited Liability Company Unit Common (B)	767 uts.		10/05/12		767		30,638
Limited Liability Company Unit Preferred (B)	76 uts.		10/05/12		75,920		87,765
					76,687		118,403
GenNx Novel Holding, Inc.
A manufacturer and distributor of nutraceutical ingredients.
13% Senior Subordinated Note due 03/27/2020	$	1,582,025	03/27/14		1,554,416		1,582,024
Common Stock (B)	15,500 shs.		03/27/14		155,000		110,834
					1,709,416		1,692,858
gloProfessional Holdings, Inc.
A marketer and distributor of premium mineral-based cosmetics, cosmeceuticals and professional hair care products to the professional spa and physician’s office channels.
14% Senior Subordinated Note due 03/27/2019	$	1,178,161	03/27/13		1,161,098		1,178,161
Common Stock (B)	1,181 shs.		03/27/13		118,110		172,884
					1,279,208		1,351,045
Golden County Foods Holding, Inc.
A manufacturer of frozen appetizers and snacks.
14% Senior Subordinated Note due 11/13/2019 (D)	$	38,950	11/13/13		231,183		—
Preferred Stock (B)	151,643 shs.		11/13/13		77,643		—
Preferred Stock Series F (B)	155,800 shs.		11/13/13		924,731		—
					1,233,557		—

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Grakon Parent
The leading designer and manufacturer of highly-engineered and customized LED and incandescent lighting systems for transportation-based markets.
12% Senior Subordinated Note due 04/30/2021	$	1,550,169	10/31/14	$	1,520,514	$	1,568,855
Common Stock (B)	175 shs.		10/31/14		174,831		179,002
					1,695,345		1,747,857
GTI Holding Company
A designer, developer, and marketer of precision specialty hand tools and handheld test instruments.
12% Senior Subordinated Note due 02/05/2020	$	727,865	02/05/14		683,399		733,985
Common Stock (B)	846 shs.		02/05/14		84,636		83,538
Warrant, exercisable until 2024, to purchase
common stock at $.01 per share (B)	397 shs.		02/05/14		36,816		39,202
					804,851		856,725
Handi Quilter Holding Company
A designer and manufacturer of long-arm quilting machines and related components for the consumer quilting market.
12% Senior Subordinated Note due 06/19/2021	$	1,437,500	12/19/14		1,409,581		1,451,307
Limited Liability Company (B)	288 uts.		12/19/14		287,500		288,256
Limited Liability Company (B)	2,875 uts.		12/19/14		—		12,649
					1,697,081		1,752,212
Hartland Controls Holding Corporation
A manufacturer and distributor of electronic and electromechanical components.
14% Senior Subordinated Note due 08/14/2019	$	1,089,948	02/14/14		1,071,330		1,111,747
Common Stock (B)	821 shs.		02/14/14		822		159,342
Preferred Stock Series A (B)	2,547 shs.		02/14/14		254,734		277,795
					1,326,886		1,548,884
Healthcare Direct Holding Company
A direct-to-customer marketer of discount dental plans.
Common Stock (B)	517 shs.		03/09/12		51,724		75,360

HHI Group, LLC
A developer, marketer, and distributor of hobby-grade radio control products.
14% Senior Subordinated Note due 01/17/2020	$	1,560,524	01/17/14		1,534,271		1,573,524
Limited Liability Company Unit (B)	102 uts.		01/17/14		101,563		69,599
					1,635,834		1,643,123

Hi-Rel Group LLC
A manufacturer and distributor of precision metal piece parts for the microelectronic packaging industry, serving the aerospace/ defense, telecommunications, and medical end markets.
12% Senior Subordinated Note due 03/15/2018	$	703,125	04/15/13	671,312	709,912
Limited Liability Company Unit (B)	234 uts.		04/15/13	234,375	179,237
Warrant, exercisable until 2020, to purchase
common stock at $.01 per share (B)	37,177 shs.		04/15/13	32,344	27,008
				938,031	916,157

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

HOP Entertainment LLC
A provider of post production equipment and services to producers of television shows and motion pictures.
Limited Liability Company Unit Class F (B)	47 uts.		10/14/11	$	—	$	—
Limited Liability Company Unit Class G (B)	114 uts.		10/14/11		—		—
Limited Liability Company Unit Class H (B)	47 uts.		10/14/11		—		—
Limited Liability Company Unit Class I (B)	47 uts.		10/14/11		—		—
					—		—
Hospitality Mints Holding Company
A manufacturer of individually-wrapped imprinted promotional mints.
12% Senior Subordinated Note due 08/19/2016	$	1,098,837	08/19/08		1,076,215		1,098,837
Common Stock (B)	251 shs.		08/19/08		251,163		80,488
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B)	65 shs.		08/19/08		60,233		20,805
					1,387,611		1,200,130
HVAC Holdings, Inc.
A provider of integrated energy efficiency services and maintenance programs for HVAC systems.
12.5% Senior Subordinated Note due 09/27/2019	$	1,190,423	09/27/12		1,172,944		1,202,327
Limited Liability Company Unit Class A Common (B)	910 uts.		09/27/12		910		30,553
Limited Liability Company Unit Class A Preferred (B)	1,127 uts.		09/27/12		112,726		142,206
					1,286,580		1,375,086
Ideal Tridon Holdings, Inc.
A designer and manufacturer of clamps and couplings used in automotive and industrial end markets.
Common Stock (B)	93 shs.		10/27/11		92,854		187,527

Impact Confections
An independent manufacturer and marketer of confectionery products including Warheads® brand sour candies, Melster® brand classic candies, and co-manufactured/private label classic candies.
13% Senior Subordinated Note due 11/04/2020	$	1,067,920	11/10/14		1,047,582		1,082,329
Common Stock (B)	2,300 shs.		11/10/14		230,000		157,913
					1,277,582		1,240,242
Insurance Claims Management, Inc.
A third party administrator providing auto and property claim administration services for insurance companies.
Common Stock (B)	47 shs.		02/27/07		1,424		244,680

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

J A C Holding Enterprises, Inc.
A supplier of luggage racks and accessories to the original equipment manufacturers.
Preferred Stock A (B)	165 shs.		12/20/10	$	165,000	$	202,522
Preferred Stock B (B)	0.06 shs.		12/20/10		—		74
Common Stock	33 shs.		12/20/10		1,667		—
Warrant, exercisable until 2020, to purchase
common stock at $.01 per share (B)	12 shs.		12/20/10		105,643		57,920
					272,310		260,516
Janus Group Holdings LLC
A manufacturer of roll-up doors and hallway systems that are primarily used in self-storage facilities.
13.5% Senior Subordinated Note due 06/10/2019	$	1,342,391	12/11/13		1,320,212		1,369,239
Limited Liability Company Unit Class A (B)	283 uts.		12/11/13		139,258		473,448
					1,459,470		1,842,687
JMH Investors LLC
A developer and manufacturer of custom formulations for a wide variety of foods.
14.25% Senior Subordinated Note due 12/05/2019	$	1,087,841	12/05/12		1,071,893		1,030,740
Limited Liability Company Unit (B)	311,710 uts.		12/05/12		224,937		72,633
					1,296,830		1,103,373
K & N Parent, Inc.
A manufacturer and supplier of automotive aftermarket performance air filters and intake systems.
Preferred Stock Series A	102 shs.		12/23/11		—		—
Preferred Stock Series B	29 shs.		12/23/11		—		—
Common Stock	163 shs.		*		6,522		159,147
* 12/23/11 and 06/30/14.					6,522		159,147

K N B Holdings Corporation
A designer, manufacturer and marketer of products for the custom framing market.
Common Stock (B)	71,053 shs.		05/24/06		71,053		57,403
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B)	43,600 shs.		05/25/06		37,871		35,224
					108,924		92,627
K P I Holdings, Inc.
The largest player in the U.S. non-automotive, non-ferrous die casting segment.
Convertible Preferred Stock Series C (B)	29 shs.		06/30/09		29,348		98,987
Convertible Preferred Stock Series D (B)	13 shs.		09/17/09		12,958		42,120
Common Stock (B)	235 shs.		07/15/08		234,783		205,326
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	51 shs.		07/16/08		50,836		44,462
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	67 shs.		09/17/09		—		58,945
					327,925		449,840

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

M V I Holding, Inc.
A manufacturer of large precision machined metal components used in equipment which services a variety of industries, including the oil and gas, mining, and defense markets.
Common Stock (B)	32 shs.		09/12/08	$	32,143	$	—
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	35 shs.		09/12/08		34,714		—
					66,857		—
Mail Communications Group, Inc.
A provider of mail processing and handling services, lettershop services, and commercial printing services.
Limited Liability Company Unit	12,764 uts.		*		166,481		272,034
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B)	1,787 shs.		05/04/07		22,781		38,087
* 05/04/07 and 01/02/08.					189,262		310,121

Manhattan Beachwear Holding Company
A designer and distributor of women’s swimwear.
12.5% Senior Subordinated Note due 01/15/2018	$	419,971	01/15/10		393,820		419,971
15% Senior Subordinated Note due 01/15/2018	$	114,537	10/05/10		113,455		114,537
Common Stock (B)	35 shs.		10/05/10		35,400		41,474
Common Stock Class B (B)	118 shs.		01/15/10		117,647		137,836
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B)	104 shs.		10/05/10		94,579		121,985
					754,901		835,803
MedSystems Holdings LLC
A manufacturer of enteral feeding products, such as feeding tubes and other products related to assisted feeding.
Preferred Unit (B)	66 uts.		08/29/08		46,152		87,236
Common Unit Class A (B)	671 uts.		08/29/08		671		102,806
Common Unit Class B (B)	263 uts.		08/29/08		63,564		40,330
					110,387		230,372
Merex Holding Corporation
A provider of after-market spare parts and components, as well as Maintenance, Repair and Overhaul services for “out of production” or “legacy” aerospace and defense systems that are no longer effectively supported by the original equipment manufacturers.
14% Senior Subordinated Note due 10/30/2019	$	454,295	09/22/11		448,780		444,420
Limited Liability Company Unit Series A	228 uts.		05/07/14		14,760		12,073
Limited Liability Company Unit Series B (B)	155,945 uts.		09/22/11		155,945		165,648
					619,485		622,141
MES Partners, Inc.
An industrial service business offering an array of cleaning and environmental services to the Gulf Coast region of the U.S.
12% Senior Subordinated Note due 09/30/2021	$	1,087,462	09/30/14		1,066,839		1,102,664
Common Stock Class B (B)	219,545 shs.		09/30/14		219,545		208,568
					1,286,384		1,311,232

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

MicroGroup, Inc.
A manufacturer of precision parts and assemblies, and a value-added supplier of metal tubing and bars.
7% Senior Subordinated Note due 06/30/2015 (D)	$	902,727	*	$	865,676	$	816
Preferred Stock Series A (B)	519 shs.		10/10/12		498,734		—
Common Stock (B)	238 shs.		*		238,000		—
Common Stock Series B (B)	597 shs.		10/10/12		6		—
Warrant, exercisable until 2015, to purchase
common stock at $.02 per share (B)	87 shs.		*		86,281		—
* 08/12/05 and 09/11/06.					1,688,697		816

MNX Holding Company
An international third party logistics company providing customized logistics services to customers across the globe.
14% Senior Subordinated Note due 11/02/2019	$	1,264,828	11/02/12		1,246,530		1,227,058
Common Stock (B)	45 shs.		11/02/12		44,643		13,198
					1,291,173		1,240,256
Money Mailer
A leading provider of hyperlocal shared direct mail advertising as well as interactive and online advertising solutions through its nationwide production and distribution network.
Preferred Stock	1,332,865 shs.		12/10/14		1,312,872		1,332,865

Motion Controls Holdings
A manufacturer of high performance mechanical motion control and linkage products.
14.25% Senior Subordinated Note due 08/15/2020	$	978,576	11/30/10		968,944		978,576
Limited Liability Company Unit Class B-1 (B)	75,000 uts.		11/30/10		—		79,711
Limited Liability Company Unit Class B-2 (B)	6,801 uts.		11/30/10		—		7,228
					968,944		1,065,515
NABCO, Inc.
A producer of explosive containment vessels in the United States.
Common Stock (B)	429 shs.		12/20/12		306,091		211,706

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

NetShape Technologies, Inc.
A manufacturer of powder metal and metal injection molded precision components used in industrial, consumer, and other applications.
12% Senior Subordinated Note due 06/10/2020	$	810,000	02/02/07	$	809,080	$	810,000
Limited Partnership Interest of
Saw Mill PCG Partners LLC (B)	1.38% int.		02/01/07		588,077		—
Limited Liability Company Unit Class D of
Saw Mill PCG Partners LLC (B)	9 uts.		*		8,873		—
Limited Liability Company Unit Class D-1 of
Saw Mill PCG Partners LLC (B)	121 uts.		09/30/09		121,160		230,429
Limited Liability Company Unit Class D-2 of
Saw Mill PCG Partners LLC (B)	68 uts.		04/29/11		34,547		155,551
Limited Liability Company Unit Class D-3 of
Saw Mill PCG Partners LLC (B)	104 uts.		12/10/14		103,904		109,926
* 12/18/08 and 09/30/09.					1,665,641		1,305,906

Northwest Mailing Services, Inc.
A producer of promotional materials for companies that use direct mail as part of their customer retention and loyalty programs.
Limited Partnership Interest (B)	1,740 uts.		*		174,006		127,471
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B)	2,605 shs.		*		260,479		190,818
* 07/09/09 and 08/09/10.					434,485		318,289

O E C Holding Corporation
A provider of elevator maintenance, repair and modernization services.
13% Senior Subordinated Note due 08/23/2018	$	444,445	06/04/10		425,307		444,445
Preferred Stock Series A (B)	554 shs.		06/04/10		55,354		68,453
Preferred Stock Series B (B)	311 shs.		06/04/10		31,125		—
Common Stock (B)	344 shs.		06/04/10		344		—
					512,130		512,898
Pearlman Enterprises, Inc.
A developer and distributor of tools, equipment and supplies to the natural and engineered stone industry.
Preferred Stock Series A (B)	1,236 shs.		05/22/09		59,034		1,547,014
Preferred Stock Series B (B)	7,059 shs.		05/22/09		290,050		50,527
Common Stock (B)	21,462 shs.		05/22/09		993,816		—
					1,342,900		1,597,541
Petroplex Inv Holdings LLC
A leading provider of acidizing services to E&P customers in the Permian Basin.
Limited Liability Company Unit	156,250 uts.		11/29/12		156,250		187,390

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Polytex Holdings LLC
A manufacturer of water based inks and related products serving primarily the wall covering market.
13% Senior Subordinated Note due 01/31/2020	$	1,043,599	07/31/14	$	1,024,662	$	1,054,416
Limited Liability Company Unit	148,096 uts.		07/31/14		148,096		197,530
					1,172,758		1,251,946
PPC Event Services
A special event equipment rental business.
14% Senior Subordinated Note due 05/20/2020	$	1,126,856	11/20/14		1,105,323		1,143,332
Limited Liability Company Unit (B)	3,450 uts.		11/20/14		172,500		169,565
					1,277,823		1,312,897
R A J Manufacturing Holdings LLC
A designer and manufacturer of women’s swimwear sold under a variety of licensed brand names.
8% Senior Subordinated Note due 01/02/2017 (D)	$	49,908	01/02/14		217,411		49,908
Limited Liability Company Unit (B)	1,497 uts.		12/15/06		149,723		—
Limited Liability Company Unit Class B Common (B)	6 uts.		01/02/14		219,593		—
limited liability company unit series B-1 preferred (B)	9 uts.		01/02/14		374,307		374,308
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B)	2 shs.		12/15/06		69,609		—
					1,030,643		424,216
REVSpring, Inc.
A provider of accounts receivable management and revenue cycle management services to customers in the healthcare, financial and utility industries.
Limited Liability Company Unit Class A (B)		13,548 uts.	*		135,477		179,387
*10/21/11 and 08/03/12.

Safety Infrastructure Solutions
A provider of trench safety equipment to a diverse customer base across multiple end markets in Texas and the Southwestern United States.
Preferred Stock (B)	2,098 shs.		03/30/12		83,920		107,781
Common Stock (B)	983 shs.		03/30/12		9,830		74,042
					93,750		181,823
Signature Systems Holding Company
A seller and installer of a variety of modular surfaces, industrial matting and related products used for ground protection.
Common Stock (B)	76 shs.		03/15/13		75,509		200,510
Warrant, exercisable until 2023, to purchase
common stock A at $.01 per share (B)	31 shs.		03/15/13		28,316		81,920
					103,825		282,430

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Smart Source Holdings LLC
A short-term computer rental company.
Limited Liability Company Unit (B)	328 uts.		*	$	261,262	$	345,865
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B)	83 shs.		*		67,467		87,608
* 08/31/07 and 03/06/08.					328,729		433,473

SMB Machinery Holdings, Inc.
A reseller of used, rebuilt and refurbished packaging and processing equipment, primarily serving the bottling and food manufacturing industries.
14% Senior Subordinated Note due 10/18/2019	$	749,830	10/18/13		737,746		705,688
Common Stock (B)	841 shs.		10/18/13		84,100		27,572
					821,846		733,260
Spartan Foods Holding Company
A manufacturer of branded pizza crusts and pancakes.
12.25% Senior Subordinated Note due 03/01/2019	$	605,299	12/15/09		556,139		605,299
Warrant, exercisable until 2020, to purchase
common stock at $.01 per share (B)	136 shs.		12/15/09		120,234		109,082
					676,373		714,381
Strahman Holdings Inc
A manufacturer of industrial valves and wash down equipment for a variety of industries, including chemical, petrochemical, polymer, pharmaceutical, food processing, beverage and mining.
14% Senior Subordinated Note due 06/13/2019	$	1,059,783	12/13/13		1,041,110		1,059,119
Preferred Stock Series A (B)	158,967 shs.		12/13/13		158,967		194,761
					1,200,077		1,253,880
Sundance Investco LLC
A provider of post-production services to producers of movies and television shows.
Limited Liability Company Unit Class A (B)	3,405 uts.		03/31/10		—		—

Sunrise Windows Holding Company
A manufacturer and marketer of premium vinyl windows exclusively selling to the residential remodeling and replacement market.
14% Senior Subordinated Note due 12/14/2017	$	1,049,142	12/14/10		1,020,077		1,057,110
14% Senior Subordinated PIK Note due 12/14/2017	$	102,810	08/17/12		100,684		102,810
Common Stock (B)	38 shs.		12/14/10		38,168		36,095
Warrant, exercisable until 2020, to purchase
common stock at $.01 per share (B)	37 shs.		12/14/10		37,249		35,225
					1,196,178		1,231,240

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Synteract Holdings Corporation
A provider of outsourced clinical trial management services to pharmaceutical and biotechnology companies.
14% Senior Subordinated Note due 02/26/2019	$	2,174,616	09/02/08	$	2,122,784	$	2,174,615
Preferred Stock Series D (B)	257 shs.		02/27/13		25,678		—
Redeemable Preferred Stock Series A (B)	678 shs.		10/03/08		6,630		—
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	6,778 shs.		09/02/08		59,661		—
					2,214,753		2,174,615
Torrent Group Holdings, Inc.
A contractor specializing in the sales and installation of engineered drywells for the retention and filtration of stormwater and nuisance water flow.
3% Senior Subordinated Note due 12/31/2018 (D)	$	1,062,258	12/05/13		—		1,009,145
15% Senior Subordinated Note due 12/05/2020 (D)	$	46,798	12/05/13		219,203		14,039
Warrant, exercisable until 2023, to purchase
common stock at $.01 per share (B)	28,079 shs.		12/05/13		—		—
					219,203		1,023,184
Transpac Holding Company
A designer, importer, and wholesaler of home décor and seasonal gift products.
8% Senior Subordinated Note due 10/31/2015 (D)	$	938,651	10/31/07		909,276		—
Common Stock (B)	110 shs.		10/31/07		110,430		—
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B)	50 shs.		10/31/07		46,380		—
					1,066,086		—
Tranzonic Holdings LLC
A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom supplies and sanitary care products.
14% Senior Subordinated Note due 07/05/2019	$	1,529,337	07/05/13		1,505,948		1,544,630
Limited Liability Company Unit Class A (B)	147,727 shs.		07/05/13		147,727		178,241
					1,653,675		1,722,871
Tristar Global Energy Solutions, Inc.
A hydrocarbon and decontamination services provider serving refineries worldwide.
12.5% Senior Subordinated Note due 07/31/2020	$	1,113,822	01/23/15		1,091,583		1,111,678

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Truck Bodies & Equipment International
A designer and manufacturer of accessories for heavy and medium duty trucks, primarily dump bodies, hoists, various forms of flat-bed bodies, landscape bodies and other accessories.
Preferred Stock Series B (B)	128 shs.		10/20/08	$	127,677	$	504,735
Common Stock (B)	393 shs.		*		423,985		121,176
Warrant, exercisable until 2017, to purchase
common stock at $.02 per share (B)	81 shs.		*		84,650		25,025
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	558 shs.		10/20/08		—		172,099
* 07/19/05 and 12/22/05.					636,312		823,035

TruStile Doors, Inc.
A manufacturer and distributor of interior doors.
Limited Liability Company Unit (B)	5,888 uts.		02/28/11		78,125		373,764

Vitex Packaging Group, Inc.
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
Class B Unit (B)	406,525 uts.		10/29/09		184,266		—
Class C Unit (B)	450,000 uts.		10/29/09		413,244		331,785
Limited Liability Company Unit Class A (B)	383,011 uts.		*		229,353		—
Limited Liability Company Unit Class B (B)	96,848 uts.		07/19/04		96,848		—
* 07/19/04 and 10/29/09.					923,711		331,785

VP Holding Company
A provider of school transportation services for special-needs and homeless children in Massachusetts.
13% Senior Subordinated Note due 03/31/2021	$	504,354	03/31/14		495,534		519,485
Common Stock (B)	3,632 shs.		03/31/14		363,158		410,884
					858,692		930,369
Wellborn Forest Holding Company
A manufacturer of semi-custom kitchen and bath cabinetry.
8% Senior Subordinated Note due 09/30/2017 (D)	$	1,680,931	11/30/06		867,531		—
Common Stock (B)	101 shs.		11/30/06		101,250		—
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B)	51 shs.		11/30/06		45,790		—
					1,014,571		—
Wheaton Holding Corporation
A distributor and manufacturer of laboratory supply products and packaging.
Preferred Stock Series B (B)	703 shs.		06/08/10		70,308		109,020
Common Stock (B)	353 shs.		06/08/10		353		83,647
					70,661		192,667

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount, Shares, Units or Ownership Percentage		Acquisition Date	Cost		Fair Value

Whitcraft Holdings, Inc.
A leading independent manufacturer of precision formed, machined, and fabricated flight-critical aerospace components.
12% Senior Subordinated Note due 12/16/2018	$	794,521	12/16/10	$	755,974	$	794,521
Common Stock (B)	205 shs.		12/16/10		205,480		105,697
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B)	55 shs.		12/16/10		49,334		28,405
					1,010,788		928,623
WP Supply Holding Corporation
A distributor of fresh fruits and vegetables to grocery wholesalers and foodservice distributors in the upper Midwest.
14.5% Senior Subordinated Note due 06/12/2020	$	925,425	11/03/11		914,563		930,115
Common Stock	1,500 shs.		11/03/11		150,000		167,490
					1,064,563		1,097,605
York Wall Holding Company
A designer, manufacturer and marketer of wall covering products for both residential and commercial wall coverings.
12.5% Senior Subordinated Note due 03/04/2021	$	1,543,170	03/04/15		1,512,606		1,552,800
Common Stock (B)	1,835 shs.		03/04/15		183,500		174,325
					1,696,106		1,727,125

Total Private Placement Investments (E)				$	87,663,033	$	88,118,442

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Interest Rate			Due Date	Principal Amount		Cost		Market Value

Rule 144A Securities - 15.85%:

Bonds - 15.85%
Acadia Healthcare Company Inc.		5.625	%	02/15/23	$	317,000	$	317,000	$	322,548
Alliant Techsystems Inc.		5.250		10/01/21		500,000		500,000		507,500
Amsted Industries		5.375		09/15/24		240,000		240,000		240,000
ArcelorMittal		6.125		06/01/18		500,000		508,867		537,250
Audatex North America, Inc.		6.125		11/01/23		210,000		219,142		222,075
Belden Inc.		5.250		07/15/24		210,000		210,000		211,575
California Resources Corporation		6.000		11/15/24		480,000		480,000		421,200
CITGO Petroleum Corporation		6.250		08/15/22		425,000		425,000		412,250
Consolidated Energy Finance S.A.		6.750		10/15/19		447,000		442,534		450,353
Cornerstone Chemical Company		9.375		03/15/18		375,000		381,637		388,125
CTP Transportation Products, LLC		8.250		12/15/19		310,000		310,000		319,300
Dean Foods		6.500		03/15/23		329,000		329,000		330,645
Endo Finance LLC		5.375		01/31/23		500,000		490,602		498,750
Family Tree Escrow, LLC		5.750		03/01/23		156,000		156,000		164,190
First Data Corporation		7.375		06/15/19		250,000		250,000		261,250
Forest Laboratories, Inc.		5.000		12/15/21		370,000		370,000		411,423
Forest Laboratories, Inc.		4.875		02/15/21		500,000		500,000		551,227
Harron Communications, L.P.		9.125		04/01/20		250,000		271,457		273,750
HD Supply, Inc.		5.250		12/15/21		127,000		127,000		130,810
Hilcorp Energy Company		5.000		12/01/24		335,000		335,000		314,900
H.J. Heinz Company		4.875		02/15/25		500,000		500,000		541,875
Huntington Ingalls Industries		5.000		12/15/21		500,000		500,000		521,250
International Wire Group		8.500		10/15/17		500,000		523,083		517,500
J.B. Poindexter Co., Inc.		9.000		04/01/22		500,000		500,000		542,500
JBS USA Holdings, Inc.		7.750		10/28/20		375,000		392,572		396,563
Jupiter Resources Inc.		8.500		10/01/22		500,000		475,531		410,000
Kenan Advantage Group, Inc.		8.375		12/15/18		500,000		515,303		520,000
Kindred Escrow Corp. II		8.750		01/15/23		500,000		500,000		547,500
LBC Tank Terminals Holding Netherlands B.V.		6.875		05/15/23		663,000		681,962		677,917
Mallinckrodt PLC		5.750		08/01/22		500,000		500,000		516,250
MEG Energy Corporation		6.375		01/30/23		500,000		500,000		460,000
MEG Energy Corporation		7.000		03/31/24		500,000		500,000		471,250
Micron Technology, Inc.		5.250		08/01/23		494,000		494,000		502,645
Moog Inc.		5.250		12/01/22		246,000		246,000		253,380
Netflix, Inc.		5.500		02/15/22		299,000		299,000		305,728
Nielsen Finance LLC		5.000		04/15/22		271,000		273,009		272,694

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Interest Rate			Due Date	Shares or Principal Amount		Cost		Market Value

Numericable Group SA		4.875	%	05/15/19	$	240,000	$	240,000	$	238,800
NXP BV/NXP Funding LLC		3.750		06/01/18		750,000		750,000		765,000
OpenText Corporation		5.625		01/15/23		382,000		382,000		396,325
Paperworks Industries, Inc.		9.500		08/15/19		500,000		510,642		512,500
Paragon Offshore plc.		6.750		07/15/22		500,000		161,455		165,000
Penske Corporation		4.875		07/11/22		500,000		498,309		540,927
Prestige Brands Holdings, Inc.		5.375		12/15/21		650,000		650,000		658,125
Safway Group Holding LLC/Finance Corporation		7.000		05/15/18		250,000		250,000		247,500
Sirius XM Radio Inc.		5.875		10/01/20		445,000		445,000		463,913
Sunoco LP		6.375		04/01/23		500,000		500,000		515,000
Topaz Marine S.A.		8.625		11/01/18		500,000		500,000		440,020
Townsquare Radio, LLC		9.000		04/01/19		500,000		534,888		532,930
Unitymedia KabelBW GmbH		6.125		01/15/25		500,000		500,000		528,750
Univision Communications		5.125		05/15/23		160,000		160,000		162,400
UPCB Finance IV Limited		5.375		01/15/25		208,000		208,000		208,000
Valeant Pharmaceuticals International		7.000		10/01/20		250,000		250,609		260,938
VRX Escrow Corp.		6.125		04/15/25		382,000		382,000		395,370
Welltec A/S		8.000		02/01/19		375,000		370,180		352,500
West Corporation		5.375		07/15/22		500,000		490,682		488,750
XPO Logistics, Inc.		7.875		09/01/19		451,000		464,200		477,495
Total Bonds								22,511,664		22,776,416

Convertible Preferred Stock - 0.00%
ETEX Corporation (B)						194		—		—
Total Convertible Preferred Stock								—		—

Preferred Stock - 0.00%
TherOX, Inc. (B)						26		—		—
Total Preferred Stock								—		—

Common Stock - 0.00%
Touchstone Health Partnership (B)						292		—		—
Total Common Stock								—		—

Total Rule 144A Securities								22,511,664		22,776,416

Total Corporate Restricted Securities							$	110,174,697	$	110,894,858

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Public Securities -28.05%: (A)	Interest Rate			Due Date	Principal Amount		Cost		Market Value

Bank Loans - 0.12%
Aquilex Holdings LLC		5.000	%	12/31/20		169,262		168,911		167,147
Total Bank Loans							$	168,911	$	167,147

Bonds - 27.93%
AAAR Corporation		7.250	%	01/15/22	$	1,000,000	$	1,051,056	$	1,135,000
Access Midstream Partners, L.P.		4.875		03/15/24		500,000		500,000		502,500
Accuride Corp		9.500		08/01/18		500,000		488,187		521,250
ADT Corporation		6.250		10/15/21		500,000		516,198		532,500
Alcoa, Inc.		6.150		08/15/20		600,000		622,165		676,986
Ally Financial, Inc.		5.500		02/15/17		750,000		757,286		780,000
Alta Mesa Financial Services		9.625		10/15/18		383,000		372,324		291,080
American Axle & Manufacturing, Inc.		5.125		02/15/19		120,000		120,000		123,600
Anglogold Holdings PLC		5.375		04/15/20		600,000		603,846		593,456
Anixter, Inc.		5.125		10/01/21		165,000		165,000		169,538
Antero Resources Corporation		5.375		11/01/21		395,000		395,000		383,150
Avis Budget Car Rental		9.750		03/15/20		375,000		375,000		408,525
B&G Foods, Inc.		4.625		06/01/21		440,000		440,000		439,450
Bank of America Corporation		4.000		04/01/24		500,000		498,281		531,858
Bonanza Creek Energy, Inc.		5.750		02/01/23		500,000		500,000		460,000
Brunswick Corporation		7.125		08/01/27		500,000		504,443		535,000
Calpine Corporation		5.750		01/15/25		340,000		340,000		342,550
Calumet Specialty Products Partners L.P.		7.625		01/15/22		500,000		501,345		505,000
CCO Holdings Capital Corporation		5.250		09/30/22		500,000		496,013		511,250
CCO Holdings Capital Corporation		5.750		01/15/24		500,000		484,067		519,375
CHC Helicopter SA		9.250		10/15/20		900,000		848,382		760,500
Chrysler Group, LLC		8.000		06/15/19		210,000		224,057		220,238
Chrysler Group, LLC		8.250		06/15/21		210,000		229,236		232,913
Cimarex Energy Co.		5.875		05/01/22		500,000		533,141		532,500
CIT Group, Inc.		5.000		08/15/22		500,000		500,000		513,125
CIT Group, Inc.		3.875		02/19/19		500,000		500,000		495,000
Clearwater Paper Corporation		4.500		02/01/23		500,000		495,837		492,500
Commercial Metals Company		4.875		05/15/23		750,000		751,337		708,750
Continental Resources, Inc.		5.000		09/15/22		500,000		509,282		493,125
CVR Refining LLC		6.500		11/01/22		350,000		339,343		350,000
Dana Holding Corporation		5.500		12/15/24		265,000		265,000		272,950
DaVita, Inc.		5.750		08/15/22		500,000		500,000		531,250
D.R. Horton, Inc.		4.000		02/15/20		500,000		500,000		507,000
Duke Realty Limited Partnership		3.875		10/15/22		500,000		504,724		522,449

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

Corporate Public Securities: (A) (Continued)	Interest Rate			Due Date	Principal Amount		Cost		Market Value

Forum Energy Technologies		6.250	%	10/01/21	$	160,000	$	160,000	$	150,000
Frontier Communications Corporation		6.875		01/15/25		500,000		491,148		495,000
General Electric Capital Corporation		5.500		01/08/20		500,000		498,913		578,951
HCA Holdings, Inc.		3.750		03/15/19		500,000		500,000		506,720
Headwaters, Inc.		7.625		04/01/19		305,000		305,093		317,719
HealthSouth Corporation		7.750		09/15/22		365,000		365,678		385,531
Hertz Corporation		6.750		04/15/19		220,000		217,886		227,150
Hilton Worldwide Holdings, Inc.		5.625		10/15/21		750,000		750,000		789,375
Hornbeck Offshore Services, Inc.		5.000		03/01/21		500,000		500,000		397,500
Icahn Enterprises L.P.		4.875		03/15/19		475,000		475,000		483,906
Icahn Enterprises L.P.		6.000		08/01/20		600,000		610,104		623,280
International Game Technology		7.500		06/15/19		500,000		499,855		533,428
Jabil Circuit, Inc.		4.700		09/15/22		500,000		499,975		517,500
Johnson Controls, Inc.		5.500		01/15/16		500,000		484,963		518,250
Kraft Foods, Inc.		5.375		02/10/20		500,000		509,566		572,942
Laboratory Corporation of America Holdings		3.600		02/01/25		500,000		499,229		502,041
Lamar Media Corp.		5.375		01/15/24		160,000		160,000		166,800
Lazard Group LLC		4.250		11/14/20		500,000		498,641		534,364
Lear Corporation		4.750		01/15/23		375,000		368,732		376,875
Lennar Corporation		4.500		11/15/19		250,000		250,602		256,875
Lennar Corporation		4.750		11/15/22		375,000		370,137		381,563
Lifepoint Hospitals, Inc.		5.500		12/01/21		350,000		359,437		366,625
MarkWest Energy Partners, L.P.		4.875		12/01/24		500,000		500,000		511,200
Masco Corporation		7.125		03/15/20		350,000		349,999		410,375
MasTec, Inc.		4.875		03/15/23		500,000		490,960		467,500
Meritor, Inc.		6.750		06/15/21		1,000,000		1,000,000		1,035,000
Morgan Stanley		5.500		01/26/20		500,000		498,507		568,246
NBC Universal Media LLC		5.150		04/30/20		500,000		499,573		573,847
NRG Energy, Inc.		6.250		07/15/22		500,000		500,000		513,750
Omnova Solutions, Inc.		7.875		11/01/18		600,000		607,420		609,000
Perry Ellis International, Inc.		7.875		04/01/19		375,000		372,514		387,188
Precision Drilling Corporation		6.625		11/15/20		250,000		255,685		235,625
Qwest Diagnostic, Inc.		4.750		01/30/20		500,000		499,273		548,039
Regency Energy Partners LP		5.875		03/01/22		425,000		418,768		461,125
Rosetta Resources Inc.		5.875		06/01/22		500,000		500,000		471,250
R.R. Donnelley & Sons Company		6.000		04/01/24		500,000		500,000		516,250
Sprint Corporation		7.125		06/15/24		155,000		155,000		151,125
Sprint Nextel Corporation		6.000		12/01/16		500,000		505,205		522,000
Steelcase, Inc.		6.375		02/15/21		500,000		505,756		573,593

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

	Interest			Due	Principal				Market
Corporate Public Securities (A) (Continued)	Rate			Date	Amount		Cost		Value

Stone Energy Corporation		7.500	%	11/15/22	$	500,000	$	513,296	$	452,500
Suburban Propane Partners, L.P.		5.750		03/01/25		500,000		500,000		510,000
Tech Data Corporation		3.750		09/21/17		500,000		503,855		515,193
Time Warner Cable, Inc.		5.000		02/01/20		500,000		494,394		557,979
T-Mobile USA Inc.		6.464		04/28/19		340,000		343,457		350,625
T-Mobile USA Inc.		6.731		04/28/22		210,000		207,359		221,025
Tronox Finance LLC		6.375		08/15/20		375,000		367,724		366,563
Tyson Foods, Inc.		4.500		06/15/22		500,000		512,838		551,651
Weatherford International		4.500		04/15/22		500,000		516,701		456,994
William Lyon Homes		7.000		08/15/22		500,000		500,000		515,625
WPX Energy, Inc.		5.250		09/15/24		425,000		425,000		373,788
Xerium Technologies, Inc.		8.875		06/15/18		416,000		431,048		429,520
Total Bonds							$	39,279,841	$	40,133,339

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

									Market
Corporate Public Securities (A) (Continued)					Shares		Cost		Value

Common Stock - 0.00%
Nortek, Inc. (B)						100	$	1	$	8,825
Total Common Stock								1		8,825

Total Corporate Public Securities							$	39,448,753	$	40,309,311


	Interest			Due	Principal				Market
Short-Term Securities:	Rate/Yield^			Date	Amount		Cost		Value

Commercial Paper - 1.39%

Pentair Finance		0.590	%	4/6/15	$	2,000,000	$	1,999,839	$	1,999,839
Total Short-Term Securities							$	1,999,839	$	1,999,839

Total Investments		106.61	%				$	151,623,289	$	153,204,008

Other Assets		5.31								7,623,839
Liabilities		(11.92	)							(17,123,519	)
Total Net Assets		100.00	%						$	143,704,328

(A)	In each of the convertible note, warrant, and common stock investments, the issuer has agreed to provide certain registration rights.

(B)	Non-income producing security.

(C)	Security valued at fair value using methods determined in good faith by or under the direction of the Board of Trustees.

(D)	Defaulted security; interest not accrued.

(E)	Illiquid security. As of March 31, 2015, the values of these securities amounted to $88,118,442 or 61.32% of net assets.

^	Effective yield at purchase

PIK -

Payment-in-kind

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

	Fair Value/			Fair Value/
Industry Classification:	Market Value			Market Value

AEROSPACE - 2.40%			Spartan Foods Holding Company		$	714,381
AAR Corporation	$	1,135,000	Tyson Foods, Inc.			551,651
Alliant Techsystems Inc.		507,500				10,067,144
Merex Holding Corporation		622,141	BROADCASTING & ENTERTAINMENT - 2.74%
Moog Inc.		253,380	HOP Entertainment LLC			—
Whitcraft Holdings, Inc.		928,623	Lamar Media Corporation			166,800
		3,446,644	Money Mailer			1,332,865
AUTOMOBILE - 7.05%			NBC Universal Media LLC			573,847
Accuride Corp		521,250	Numericable Group SA			238,800
American Axle & Manufacturing, Inc.		123,600	Time Warner Cable, Inc.			557,979
Avis Budget Car Rental		408,525	Sundance Investco LLC			—
CG Holdings Manufacturing Company		1,719,160	Townsquare Radio, LLC			532,930
Chrysler Group, LLC		453,151	Unitymedia KabelBW GmbH			528,750
Dana Holding Corporation		272,950				3,931,971
DPL Holding Corporation		1,810,780	BUILDINGS & REAL ESTATE - 3.42%
Grakon Parent		1,747,857	ACP Cascade Holdings LLC			—
Ideal Tridon Holdings, Inc.		187,527	D.R. Horton, Inc.			507,000
J A C Holding Enterprises, Inc.		260,516	Duke Realty Limited Partnership			522,449
Johnson Controls, Inc.		518,250	Lennar Corporation			638,438
K & N Parent, Inc.		159,147	Masco Corporation			410,375
Lear Corporation		376,875	MasTec, Inc.			467,500
Meritor, Inc.		1,035,000	Safway Group Holding LLC/Finance Corporation			247,500
Penske Corporation		540,927	Sunrise Windows Holding Company			1,231,240
		10,135,515	TruStile Doors, Inc.			373,764
BEVERAGE, DRUG & FOOD - 7.00%			William Lyon Homes			515,625
1492 Acquisition LLC		755,536				4,913,891
B&G Foods, Inc.		439,450	CHEMICAL, PLASTICS & RUBBER - 3.02%
Dean Foods		330,645	Compass Chemical International LLC			1,724,430
Eatem Holding Company		312,566	Cornerstone Chemical Company			388,125
H.J. Heinz Company		541,875	Omnova Solutions, Inc.			609,000
JBS USA Holdings, Inc.		396,563	Polytex Holdings LLC			1,251,946
F F C Holding Corporation		214,932	Tronox Finance LLC			366,563
Gennx Novel Holding, Inc.		1,692,858				4,340,064
Golden County Foods Holding, Inc.		—	CONSUMER PRODUCTS - 12.33%
Hospitality Mints Holding Company		1,200,130	AMS Holding LLC			344,334
Impact Confections		1,240,242	Animal Supply Company			1,698,894
JMH Investors LLC		1,103,373	Bravo Sports Holding Corporation			1,207,902
Kraft Foods, Inc.		572,942	Clearwater Paper Corporation			492,500
			Custom Engineered Wheels, Inc.			312,240

See Notes to Consolidated Financial Statements

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

	Fair Value/			Fair Value/
Industry Classification: (Continued)	Market Value			Market Value

gloProfessional Holdings, Inc.	$	1,351,045	Hi-Rel Group LLC	$	916,157
GTI Holding Company		856,725	Janus Group Holdings LLC		1,842,687
Handi Quilter Holding Company		1,752,212	J.B. Poindexter Co., Inc.		542,500
HHI Group, LLC		1,643,123	K P I Holdings, Inc.		449,840
K N B Holdings Corporation		92,627	Nortek, Inc.		8,825
Manhattan Beachwear Holding Company		835,803	O E C Holding Corporation		512,898
Micron Technology, Inc.		502,645	Strahman Holdings Inc		1,253,880
NXP BV/NXP Funding LLC		765,000	Truck Bodies & Equipment International		823,035
Perry Ellis International, Inc.		387,188			12,100,191
Prestige Brands Holdings, Inc.		—	DIVERSIFIED/CONGLOMERATE,
R A J Manufacturing Holdings LLC		424,216	SERVICE - 9.98%
R.R. Donnelley & Sons Company		516,250	ADT Corporation		532,500
Tranzonic Holdings LLC		1,722,871	AFC - Dell Holding Corporation		1,287,660
Xerium Technologies, Inc.		429,520	A S C Group, Inc.		1,518,156
York Wall Holding Company		1,727,125	A W X Holdings Corporation		210,000
		17,062,220	Advanced Technologies Holdings		547,166
CONTAINERS, PACKAGING & GLASS - 1.10%			Anglogold Holdings PLC		593,456
Paperworks Industries, Inc.		512,500	Bank of America Corporation		531,858
SMB Machinery Holdings, Inc.		733,260	Church Services Holding Company		550,146
Vitex Packaging Group, Inc.		331,785	Clough, Harbour and Associates		386,035
		1,577,545	Crane Rental Corporation		896,217
DISTRIBUTION - 3.49%			EPM Holding Company		688,643
ARI Holding Corporation		2,224,601	Hilton Worldwide Holdings, Inc.		789,375
Blue Wave Products, Inc.		792,670	HVAC Holdings, Inc.		1,375,086
BP SCI LLC		481,529	Insurance Claims Management, Inc.		244,680
HD Supply, Inc.		130,810	Mail Communications Group, Inc.		310,121
Signature Systems Holding Company		282,430	Northwest Mailing Services, Inc.		318,289
WP Supply Holding Corporation		1,097,605	Pearlman Enterprises, Inc.		1,597,541
		5,009,645	PPC Event Services		1,312,897
DIVERSIFIED/CONGLOMERATE,			Safety Infrastructure Solutions		181,823
MANUFACTURING - 8.42%			Sirius XM Radio Inc.		463,913
Advanced Manufacturing Enterprises LLC		1,346,944			14,335,562
Amsted Industries		240,000	ELECTRONICS - 1.97%
Arrow Tru-Line Holdings, Inc.		186,450	Anixter, Inc.		169,538
CTP Transportation Products, LLC		319,300	Belden Inc.		211,575
Dunn Paper		1,724,632	Connecticut Electric, Inc.		899,338
F G I Equity LLC		250,031	International Wire Group		517,500
G C Holdings		134,128	Jabil Circuit, Inc.		517,500
Hartland Controls Holding Corporation		1,548,884	Tech Data Corporation		515,193
					2,830,644

See Notes to Consolidated Financial Statements

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

	Fair Value/			Fair Value/
Industry Classification: (Continued)	Market Value			Market Value

FINANCIAL SERVICES - 6.07%			HOME & OFFICE FURNISHINGS, HOUSEWARES, AND
Ally Financial, Inc.	$	780,000	DURABLE CONSUMER PRODUCTS - 1.62%
Alta Mesa Financial Services		291,080	Airxcel Holdings	$	1,755,588
CIT Group, Inc.		1,008,125	Steelcase, Inc.		573,593
Consolidated Energy Finance S.A.		450,353	Transpac Holding Company		—
General Electric Capital Corporation		578,951	Wellborn Forest Holding Company		—
Harron Communications, L.P.		273,750			2,329,181
Icahn Enterprises L.P.		1,107,186	LEISURE, AMUSEMENT,
Lazard Group LLC		534,364	ENTERTAINMENT - 1.86%
LBC Tank Terminals Holding Netherlands B.V.		677,917	Brunswick Corporation		535,000
Morgan Stanley		568,246	CTM Holding, Inc.		1,606,501
Nielsen Finance LLC		272,694	International Game Technology		533,428
Pentair Finance		1,999,839			2,674,929
REVSpring, Inc.		179,387	MACHINERY - 3.22%
		8,721,892	ABC Industries, Inc.		497,245
HEALTHCARE, EDUCATION &			Arch Global Precision LLC		1,059,013
CHILDCARE - 7.69%			E S P Holdco, Inc.		348,365
Acadia Healthcare Company Inc.		322,548	Motion Controls Holdings		1,065,515
American Hospice Management Holding LLC		1,319,546	M V I Holding, Inc.		—
CHG Alternative Education Holding Company		1,055,579	NetShape Technologies, Inc.		1,305,906
DaVita, Inc.		531,250	Welltec A/S		352,500
GD Dental Services LLC		118,403			4,628,544
ECG Consulting Group		1,378,927	MEDICAL DEVICES/BIOTECH - 0.52%
ERG Holding Company LLC		1,023,380	ETEX Corporation		—
HCA Holdings, Inc.		506,720	Mallinckrodt PLC		516,250
Healthcare Direct Holding Company		75,360	MedSystems Holdings LLC		230,372
HealthSouth Corporation		385,531	MicroGroup, Inc.		816
Kindred Escrow Corp. II		547,500	TherOX, Inc.		—
Laboratory Corporation of America Holdings		502,041			747,438
Lifepoint Hospitals, Inc.		366,625	MINING, STEEL, IRON & NON-PRECIOUS
Qwest Diagnostic, Inc.		548,039	METALS - 0.96%
Synteract Holdings Corporation		2,174,615	Alcoa, Inc.		676,986
Touchstone Health Partnership		—	Commercial Metals Company		708,750
Wheaton Holding Corporation		192,667			1,385,736
		11,048,731	NATURAL RESOURCES - 0.58%
			ArcelorMittal		537,250
			Headwaters, Inc.		317,719
					854,969

See Notes to Consolidated Financial Statements

Babson Capital Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2015

(Unaudited)

	Fair Value/			Fair Value/
Industry Classification: (Continued)	Market Value			Market Value

OIL & GAS - 8.33%			TECHNOLOGY - 1.13%
Access Midstream Partners, L.P.	$	502,500	Audatex North America, Inc.	$	222,075
Antero Resources Corporation		383,150	First Data Corporation		261,250
Avantech Testing Services LLC		772,416	Netflix, Inc.		305,728
Bonanza Creek Energy, Inc.		460,000	OpenText Corporation		396,325
California Resources Corporation		421,200	Smart Source Holdings LLC		433,473
Calumet Specialty Products Partners L.P.		505,000			1,618,851
Cimarex Energy Co.		532,500	TELECOMMUNICATIONS - 2.53%
CITGO Petroleum Corporation		412,250	CCO Holdings Capital Corporation		1,030,625
Continental Resources, Inc.		493,125	Frontier Communications Corporation		495,000
CVR Refining LLC		350,000	Sprint Corporation		151,125
Forum Energy Technologies		150,000	Sprint Nextel Corporation		522,000
Hilcorp Energy Company		314,900	T-Mobile USA Inc.		571,650
Hornbeck Offshore Services, Inc.		397,500	Univision Communications		162,400
Jupiter Resources Inc.		410,000	UPCB Finance IV Limited		208,000
MarkWest Energy Partners, L.P.		511,200	West Corporation		488,750
MEG Energy Corporation		931,250			3,629,550
Paragon Offshore plc.		165,000	TRANSPORTATION - 3.71%
Petroplex Inv Holdings LLC		187,390	CHC Helicopter SA		760,500
Precision Drilling Corporation		235,625	Hertz Corporation		227,150
Regency Energy Partners LP		461,125	Huntington Ingalls Industries		521,250
Rosetta Resources Inc.		471,250	Kenan Advantage Group, Inc.		520,000
Stone Energy Corporation		452,500	MNX Holding Company		1,240,256
Sunoco LP		515,000	NABCO, Inc.		211,706
Tristar Global Energy Solutions, Inc.		1,111,678	Topaz Marine S.A.		440,020
Weatherford International		456,994	VP Holding Company		930,369
WPX Energy, Inc.		373,788	XPO Logistics, Inc.		477,495
		11,977,341			5,328,746
PHARMACEUTICALS - 2.66%			UTILITIES - 0.60%
Clarion Brands Holding Corp.		1,699,178	Calpine Corporation		342,550
Endo Finance LLC		498,750	NRG Energy, Inc.		513,750
Forest Laboratories, Inc.		962,650			856,300
Valeant Pharmaceuticals International		260,938	WASTE MANAGEMENT / POLLUTION - 1.74%
VRX Escrow Corp.		395,370	Aquilex Holdings LLC		167,147
		3,816,886	MES Partners, Inc.		1,311,232
RETAIL STORES - 0.47%			Torrent Group Holdings, Inc.		1,023,184
Family Tree Escrow, LLC		164,190			2,501,563
Suburban Propane Partners, L.P.		510,000
		674,190	Total Investments - 106.61%	$	153,204,008

See Notes to Consolidated Financial Statements

Fair Values Hierarchy

The Trust categorizes its investments measured at fair value in three levels, based on the inputs and assumptions used to determine fair value. These levels are as follows:

Level 1 – quoted prices in active markets for identical securities

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Trust’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used to value the Trust’s net assets as of March 31, 2015:

Assets	Total		Level 1		Level 2		Level 3
Restricted Securities
Corporate Bonds		85,719,001		—		22,776,416		62,942,585
Common Stock - U.S.		7,563,098		—		—		7,563,098
Preferred Stock		7,011,678		—		—		7,011,678
Partnerships and LLCs		10,601,084		—		—		10,601,081
Public Securities
Bank Loans		167,147		—		167,147		—
Corporate Bonds		40,133,339		—		40,133,339		—
Common Stock - U.S.		8,825		8,825		—		—
Short-term Securities		1,999,839		—		1,999,839		—
Total	$	153,204,008	$	8,825	$	65,076,741	$	88,118,442

See information disaggregated by security type and industry classification in the Consolidated Schedule of Investments.

Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:

														Transfers
	Beginning													in and /		Ending
	balance at		Included											or out of		balance at
Assets	12/31/2014		in earnings		Purchases			Sales			Prepayments			Level 3		03/31/2015

Restricted Securities
Corporate Bonds	$	59,265,205	$	250,468	$	7,135,017		$	(488,617	)	$	(3,219,488	)	$	—		62,942,585
Common Stock - U.S.		8,548,845		534,262		182,936			(1,702,945	)		—			—		7,563,098
Preferred Stock		6,123,833		955,615		(573	)		(67,197	)		—			—		7,011,678
Partnerships and LLCs		9,571,615		847,906		323,337			(141,777	)		—			—		10,601,081
Public Securities
Common Stock		—		—		—			—			—			—		—

	$	83,509,498	$	2,588,251	$	7,640,717		$	(2,400,536	)	$	(73,219,488	)	$	—		88,118,442

There were no transfers into or out of Level 1 or Level 2 assets.

ITEM 2. CONTROLS AND PROCEDURES.

(a) The principal executive officer and principal financial officer of the Registrant evaluated the effectiveness of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act") as of a date within 90 days of the filing date of this report and based on that evaluation have concluded that such disclosure controls and procedures are effective to provide reasonable assurance that material information required to be disclosed by the Registrant on Form N-Q is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b) There have been changes in the Registrant's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act)("internal controls") that occurred during the Registrant's last fiscal quarter. The Registrant's investment adviser, Babson Capital Management LLC, who maintains the Registrant's internal controls, revised its internal controls to oversee State Street Bank & Trust who now provides certain administrative and accounting services to the Registrant.

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) are attached hereto as an exhibit.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Babson Capital Participation Investors

By (Signature and Title)*

/s/ Michael L. Klofas

Michael L. Klofas, President

Date May 29, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By (Signature and Title)*

/s/ Michael L. Klofas

Michael L. Klofas, President

Date May 29, 2015

By (Signature and Title)*

/s/ James M. Roy

James M. Roy, Vice President and

Chief Financial Officer

Date May 29, 2015

* PRINT THE NAME AND TITLE OF EACH SIGNING OFFICER UNDER HIS OR HER SIGNATURE.