UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-5531
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MassMutual Participation Investors
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(Exact name of registrant as specified in charter)
1500 Main Street, P.O. Box 15189, Springfield, MA 01115-5189
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(Address of principal executive offices) (Zip code)
Patricia J. Walsh, Vice President, Secretary and Chief Legal Officer
1500 Main Street, Suite 2800, P.O. Box 15189, Springfield, MA 01115-5189
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(Name and address of agent for service)
Registrant's telephone number, including area code: 413-226-1000
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Date of fiscal year end: 12/31
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Date of reporting period: 06/30/10
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 110 F Street NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORT TO STOCKHOLDERS.
Attached hereto is the semi-annual shareholder report transmitted to
shareholders pursuant to Rule 30e-1 of the Investment Company Act of
1940, as amended.
MASSMUTUAL
PARTICIPATION INVESTORS
REPORT FOR THE
SIX MONTHS ENDED JUNE 30, 2010
[LOGO]
ADVISER
Babson Capital Management LLC *
1500 Main Street, P.O. Box 15189
Springfield, Massachusetts 01115-5189
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
Boston, Massachusetts 02110
COUNSEL TO THE TRUST
Ropes & Gray LLP
Boston, Massachusetts 02110
CUSTODIAN
Citibank, N.A.
New York, New York 10043
TRANSFER AGENT & REGISTRAR
Shareholder Financial Services, Inc. *
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
INTERNET WEBSITE
www.babsoncapital.com/mpv
MassMutual Participation Investors
c/o Babson Capital Management LLC
[LOGO] 1500 Main Street, Suite 2200
Springfield, Massachusetts 01115
(413) 226-1516
* Member of the MassMutual Financial Group
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INVESTMENT OBJECTIVE AND POLICY
MassMutual Participation Investors (the "Trust") is a closed-end management
investment company, first offered to the public in 1988, whose shares are traded
on the New York Stock Exchange under the trading symbol "MPV". The Trust's share
price can be found in the financial section of most newspapers as "MassPrt" or
"MassMuPrt" under either the New York Stock Exchange listings or Closed-End Fund
Listings.
The Trust's investment objective is to maximize total return by providing a high
level of current income, the potential for growth of income, and capital
appreciation. The Trust's principal investments are privately placed,
below-investment grade, long-term debt obligations purchased directly from their
issuers, which tend to be smaller companies. At least half of these investments
normally include equity features such as common stock, warrants, conversion
rights, or other equity features that provide the Trust with the opportunity to
realize capital gains. The Trust will also invest in publicly traded debt
securities (including high yield securities), again with an emphasis on those
with equity features, and in convertible preferred stocks and, subject to
certain limitations, readily marketable equity securities. Below-investment
grade or high yield securities have predominantly speculative characteristics
with respect to the capacity of the issuer to pay interest and repay principal.
In addition, the Trust may temporarily invest in high quality, readily
marketable securities.
Babson Capital Management LLC ("Babson Capital") manages the Trust on a total
return basis. The Trust distributes substantially all of its net income to
shareholders each year. Accordingly, the Trust pays dividends to shareholders in
January, May, August, and November. All registered shareholders are
automatically enrolled in the Dividend Reinvestment and Cash Purchase Plan
unless cash distributions are requested.
FORM N-Q
The Trust files its complete schedule of portfolio holdings with the U.S.
Securities and Exchange Commission ("SEC") for the first and third quarters of
each fiscal year on Form N-Q. This information is available (i) on the SEC's
website at http://www.sec.gov; and (ii) at the SEC's Public Reference Room in
Washington, DC (which information on their operation may be obtained by calling
1-800-SEC-0330). A complete schedule of portfolio holdings as of each
quarter-end is available upon request by calling, toll-free, 866-399-1516.
PROXY VOTING POLICIES & PROCEDURES; PROXY VOTING RECORD
The Trustees of the Trust have delegated proxy voting responsibilities relating
to the voting of securities held by the Trust to Babson Capital. A description
of Babson Capital's proxy voting policies and procedures is available (1)
without charge, upon request, by calling, toll-free 866-399-1516; (2) on the
Trust's website: http://www.babsoncapital.com/mpv; and (3) on the SEC's website
at http://www.sec.gov. Information regarding how the Trust voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available (1) on the Trust's website:
http://www.babsoncapital.com/mpv; and (2) on the SEC's website at
http://www.sec.gov.
MPV
LISTED
NYSE
MassMutual Participation Investors
TO OUR SHAREHOLDERS
July 31, 2010
We are pleased to present the June 30, 2010 Quarterly Report of MassMutual
Participation Investors (the "Trust").
The Board of Trustees declared a quarterly dividend of 25 cents per share,
payable on August 13, 2010 to shareholders of record on August 2, 2010. The
Trust paid a 25 cent per share dividend for the preceding quarter. The Trust
earned 24 cents per share of net investment income for the second quarter of
2010, compared to 24 cents per share in the previous quarter.
During the second quarter, the net assets of the Trust increased to $114,929,455
or $11.47 per share compared to $111,638,992 or $11.16 per share on March 31,
2010. This translates into a 5.1% total return for the quarter, based on the
change in the Trust's net assets assuming the reinvestment of all dividends.
Longer term, the Trust returned 13.5%, 4.6%, 9.7%, and 10.7% for the 1-, 3-, 5-,
and 10-year time periods, respectively, based on the change in the Trust's net
assets assuming the reinvestment of all dividends.
The Trust's market price increased 3.3% during the quarter, from $12.50 per
share as of March 31, 2010 to $12.91 per share as of June 30, 2010. The Trust's
market price of $12.91 per share equates to a 12.6% premium over the June 30,
2010 net asset value per share of $11.47. The Trust's average quarter-end
premium for the 3-, 5-, and 10-year periods was 1.2%, 6.6% and 6.7%,
respectively. U.S. equity markets, as approximated by the Russell 2000 Index,
decreased 9.9% for the quarter. U.S. fixed income markets, as approximated by
the Barclays Capital U.S. Corporate High Yield Index, decreased 0.1% for the
quarter.
The Trust closed two new private placement investments during the second
quarter. The two new investments were in O E C Holdings Corporation and Wheaton
Holding Corporation. A brief description of these investments can be found in
the Consolidated Schedule of Investments. The total amount invested by the Trust
in these two transactions was $1,500,000.
The amount of debt and equity capital available to finance middle market buyout
transactions continued to increase during the second quarter. As a result, we
saw an improving level of deal flow as the quarter progressed. Our contacts in
the private equity and investment banking community indicate they currently are
very busy processing a large number of potential transactions, so we expect deal
flow during the remainder of 2010 to be very robust. Hopefully, this higher
level of deal flow translates into a number of new investments for the Trust in
the second half of the year. Leverage multiples continued to expand during the
quarter as capital providers aggressively pursued deal opportunities. We expect
leverage multiples to continue to increase during the rest of the year. The
downward pressure on pricing and return expectations moderated during the
quarter and we expect a relatively stable pricing environment for the rest of
the year. As I have stated in prior quarters, despite constantly changing market
conditions, our approach to investing will not change. We will continue to
maintain the same discipline and investment philosophy that has served our
shareholders well for so many years.
As the economy continued to rebound during the second quarter, the overall
condition of our portfolio continued to improve as well. It was particularly
refreshing to see many of our underperforming companies start to report
increased sales and earnings. In several situations where we had been deferring
interest on our subordinated notes, performance improved to the point where the
portfolio company was able to resume paying cash interest on our notes.
Realization activity, which generally correlates highly with improved
performance, also increased as the quarter progressed. We had two companies,
Diversco, Inc. and K-Tek Holding Corporation, successfully sold in early July.
There continues to be a significant number of portfolio companies that are in
various stages of a sale process and we are hopeful that many of these will turn
into successful realizations in the upcoming quarters.
Thank you for your continued interest in and support of MassMutual Participation
Investors.
Sincerely,
/s/ Michael L. Klofas
Michael L. Klofas
President
[PIE CHART APPEARS HERE]
Portfolio Composition as of 6/30/10 *
Private / 144A High Public High Yield
Yield Debt Debt
70.7% 14.0%
Private / Restricted Public Equity
Equity 0.4%
12.8%
Cash & Short Term
Investments
2.1%
* Based on market value of total investments (including cash)
Cautionary Notice: Certain statements contained in this report may be "forward
looking" statements. Investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on which they are
made and which reflect management's current estimates, projections, expectations
or beliefs, and which are subject to risks and uncertainties that may cause
actual results to differ materially. These statements are subject to change at
any time based upon economic, market or other conditions and may not be relied
upon as investment advice or an indication of the Trust's trading intent.
References to specific securities are not recommendations of such securities,
and may not be representative of the Trust's current or future investments. We
undertake no obligation to publicly update forward looking statements, whether
as a result of new information, future events, or otherwise.
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2010
(UNAUDITED)
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $115,142,081) $ 99,640,015
Corporate restricted securities at market value
(Cost - $ 4,127,163) 4,150,991
Corporate public securities at market value
(Cost - $ 18,680,087) 17,951,075
Short-term securities at amortized cost 1,249,894
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122,991,975
Cash 1,419,608
Interest receivable 2,942,182
Receivable for investments sold 142,982
Other assets 12,569
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TOTAL ASSETS 127,509,316
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LIABILITIES:
Investment advisory fee payable 258,591
Note payable 12,000,000
Interest payable 88,933
Accrued expenses 130,196
Accrued taxes payable 76,208
Other payables 25,933
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TOTAL LIABILITIES 12,579,861
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TOTAL NET ASSETS $114,929,455
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NET ASSETS:
Common shares, par value $.01 per share; an unlimited number authorized $ 100,186
Additional paid-in capital 93,521,296
Retained net realized gain on investments, prior years 32,871,737
Undistributed net investment income 3,577,580
Accumulated net realized gain on investments 1,142,114
Net unrealized depreciation of investments (16,283,458)
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TOTAL NET ASSETS $114,929,455
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COMMON SHARES ISSUED AND OUTSTANDING 10,018,644
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NET ASSET VALUE PER SHARE $ 11.47
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See Notes to Consolidated Financial Statements
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2
MassMutual Participation Investors
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(UNAUDITED)
INVESTMENT INCOME:
Interest $ 5,861,400
Dividends 34,953
Other 21,909
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TOTAL INVESTMENT INCOME 5,918,262
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EXPENSES:
Investment advisory fees 509,779
Interest 348,000
Trustees' fees and expenses 89,153
Professional fees 69,000
Reports to shareholders 56,000
Custodian fees 12,000
Transfer agent/registrar's expenses 9,000
Other 19,650
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TOTAL EXPENSES 1,112,582
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INVESTMENT INCOME - NET 4,805,680
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments before taxes 875,185
Income tax expense (504)
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Net realized gain on investments after taxes 874,681
Net change in unrealized depreciation of investments before taxes 2,394,046
Net change in deferred income tax expense 8,755
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Net change in unrealized depreciation of investments after taxes 2,402,801
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NET GAIN ON INVESTMENTS 3,277,482
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,083,162
============
See Notes to Consolidated Financial Statements
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3
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(UNAUDITED)
NET DECREASE IN CASH:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio securities, net $ 6,276,604
Purchases of portfolio securities (15,361,797)
Proceeds from disposition of portfolio securities 8,718,138
Interest, dividends and other income received 4,262,140
Interest expense paid (348,000)
Operating expenses paid (797,323)
Income taxes paid (36,504)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 2,713,258
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Cash flows from financing activities:
Cash dividends paid from net investment income (4,996,034)
Receipts for shares issued on reinvestment of dividends 421,142
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NET CASH USED FOR FINANCING ACTIVITIES (4,574,892)
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NET DECREASE IN CASH (1,861,634)
Cash - beginning of year 3,281,242
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CASH - END OF PERIOD $ 1,419,608
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RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,083,162
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Increase in investments (3,749,914)
Increase in interest receivable (1,419,987)
Increase in receivable for investments sold (97,369)
Increase in other assets (12,569)
Increase in investment advisory fee payable 13,509
Decrease in accrued expenses (26,631)
Decrease in accrued taxes payable (44,755)
Decrease in other payables (32,188)
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (5,369,904)
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NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,713,258
============
See Notes to Consolidated Financial Statements
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4
MassMutual Participation Investors
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
06/30/10 year ended
(Unaudited) 12/31/09
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INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income - net $ 4,805,680 $ 9,375,528
Net realized gain on investments 874,681 1,012,575
Net change in unrealized depreciation of investments 2,402,801 (2,299,878)
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Net increase in net assets resulting from operations 8,083,162 8,088,225
Increase from common shares issued on reinvestment of dividends
Common shares issued (2010 - 35,405; 2009 - 55,996) 421,142 616,488
Dividends to shareholders from:
Net investment income (2010 - $0.25 per share; 2009 - $1.00 per share) (2,500,224) (9,955,268)
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,004,080 (1,250,555)
NET ASSETS, BEGINNING OF YEAR 108,925,375 110,175,930
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NET ASSETS, END OF PERIOD/YEAR (including undistributed net investment
income of $3,577,580 and $1,272,124, respectively) $114,929,455 $108,925,375
============ ============
See Notes to Consolidated Financial Statements
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5
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF BENEFICIAL INTEREST OUTSTANDING:
For the six months For the years ended December 31,
ended 06/30/2010 --------------------------------------------------------
(Unaudited) 2009 2008 2007 2006 2005
--------- -------- -------- -------- -------- --------
Net asset value:
Beginning of year $ 10.91 $ 11.10 $ 12.84 $ 12.90 $ 12.21 $ 11.13
Net investment income (a) 0.48 0.94 1.08 1.23 1.10 0.99
Net realized and unrealized
gain (loss) on investments 0.33 (0.13) (1.82) (0.05) 0.77 1.09(b)
Total from investment operations 0.81 0.81 (0.74) 1.18 1.87 2.08
Dividends from net investment
income to common shareholders (0.25) (1.00) (1.00) (1.23) (1.18) (1.01)
Dividends from net realized gain
on investments to common shareholders -- -- -- (0.02) (0.01) --
Increase from dividends reinvested 0.00(c) 0.00(c) 0.00(c) 0.01 0.01 0.01
Total dividends (0.25) (1.00) (1.00) (1.24) (1.18) (1.00)
Net asset value: end of period/year $ 11.47 $ 10.91 $ 11.10 $ 12.84 $ 12.90 $ 12.21
Per share market value:
End of period/year $ 12.91 $ 12.20 $ 9.05 $ 13.18 $ 14.70 $ 14.05
Total investment return
Net asset value (d) 7.51% 7.60% (6.01%) 9.95% 18.64% 22.51%
Market value 5.82% 40.86% (25.36%) (1.30%) 16.81% 17.25%
Net assets (in millions):
End of period/year $114.93 $108.93 $110.18 $126.63 $126.52 $119.02
Ratio of operating expenses
to average net assets 1.39%(e) 1.41% 1.33% 1.36% 1.17% 1.45%
Ratio of interest expense
to average net assets 0.63%(e) 0.63% 0.58% 0.56% 0.57% 0.80%
Ratio of income tax expense
to average net assets (f) 0.00%(e) 0.00% 0.00% 0.48% 2.68% 2.83%
Ratio of total expenses before custodian fee
reduction to average net assets (f) 2.02%(e) 2.04% 1.91% 2.40% 4.46% 5.12%
Ratio of net expenses after custodian fee
reduction to average net assets (f) 2.02%(e) 2.04% 1.91% 2.40% 4.42% 5.08%
Ratio of net investment income
to average net assets 8.72%(e) 8.55% 8.74% 9.32% 8.43% 8.45%
Portfolio turnover 8% 23% 32% 33% 34% 32%
(a) Calculated using average shares.
(b) Amount includes $0.10 per share in litigation proceeds.
(c) Rounds to less than $0.01 per share.
(d) Net asset value return represents portfolio returns based on change in the Trust's net asset value assuming the reinvestment of
all dividends and distributions which differs from the total investment return based on the Trust's market value due to the
difference between the Trust's net asset value and the market value of its shares outstanding; past performance is no guarantee
of future results.
(e) Annualized
(f) As additional information, this ratio is included to reflect the taxes paid on retained long-term gains. These taxes paid are
netted against realized capital gains in the Statement of Operations. The taxes paid are treated as deemed distributions and a
credit for the taxes paid is passed on to shareholders.
Senior borrowings:
Total principal amount (in millions) $ 12 $ 12 $ 12 $ 12 $ 12 $ 12
Asset coverage per $1,000 of indebtedness $10,577 $10,077 $10,181 $11,552 $11,543 $10,918
See Notes to Consolidated Financial Statements
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6
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES - 90.31%: (A) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
Private Placement Investments - 86.70%
A E COMPANY, INC.
A designer and manufacturer of machined parts and assembly structures for the commercial and military aerospace industries.
11% Senior Secured Note due 2015 $ 807,692 * $ 791,538 $ 815,920
13% Senior Subordinated Note due 2016 $ 807,693 11/10/09 722,973 818,164
Common Stock (B) 184,615 shs. 11/10/09 184,615 175,384
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 92,308 shs. 11/10/09 68,566 923
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* 11/10/09 and 11/18/09. 1,767,692 1,810,391
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A H C HOLDING COMPANY, INC.
A designer and manufacturer of boilers and water heaters for the commercial sector.
15% Senior Subordinated Note due 2015 $ 1,322,210 11/21/07 1,305,074 1,345,559
Limited Partnership Interest (B) 12.26% int. 11/21/07 119,009 174,358
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1,424,083 1,519,917
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A S A P INDUSTRIES LLC
A designer and manufacturer of components used on oil and natural gas wells.
12.5% Senior Subordinated Note due 2015 $ 450,500 12/31/08 391,316 459,510
Limited Liability Company Unit Class A-2 (B) 677 uts. 12/31/08 74,333 92,220
Limited Liability Company Unit Class A-3 (B) 608 uts. 12/31/08 66,899 82,998
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532,548 634,728
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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.
12.75% Senior Subordinated Note due 2016 $ 1,227,273 10/09/09 1,051,875 1,255,214
Limited Liability Company Unit Class A (B) 1,249 uts. 10/09/09 122,727 116,595
Limited Liability Company Unit Class B (B) 1,473 uts. 10/09/09 144,716 15
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1,319,318 1,371,824
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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 2014 $ 420,000 05/15/08 411,600 391,033
13% Senior Subordinated Note due 2015 $ 420,000 05/15/08 383,659 374,704
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 --
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890,913 765,737
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7
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
ADVANCED TECHNOLOGIES HOLDINGS
A provider of factory maintenance services to industrial companies.
15% Senior Subordinated Note due 2013 $ 1,164,174 12/27/07 $ 1,141,642 $ 1,166,957
Preferred Stock (B) 546 shs. 12/27/07 270,000 224,414
------------- -------------
1,411,642 1,391,371
------------- -------------
AERO HOLDINGS, INC.
A provider of geospatial services to corporate and government clients.
10.5% Senior Secured Term Note due 2014 $ 930,000 03/09/07 916,050 942,580
14% Senior Subordinated Note due 2015 $ 720,000 03/09/07 661,704 720,000
Common Stock (B) 150,000 shs. 03/09/07 150,000 8,546
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 37,780 shs. 03/09/07 63,730 2,153
------------- -------------
1,791,484 1,673,279
------------- -------------
ALL CURRENT HOLDING COMPANY
A specialty re-seller of essential electrical parts and components primarily serving wholesale distributors.
12% Senior Subordinated Note due 2015 $ 603,697 09/26/08 556,199 596,849
Common Stock (B) 713 shs. 09/26/08 71,303 41,504
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 507 shs. 09/26/08 46,584 29,513
------------- -------------
674,086 667,866
------------- -------------
AMERICAN HOSPICE MANAGEMENT HOLDING LLC
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 2013 $ 1,687,503 * 1,606,040 1,687,503
Preferred Class A Unit (B) 1,706 uts. ** 170,600 280,495
Preferred Class B Unit (B) 808 uts. 06/09/08 80,789 110,601
Common Class B Unit (B) 16,100 uts. 01/22/04 1 49,535
Common Class D Unit (B) 3,690 uts. 09/12/06 -- 11,353
------------- -------------
* 01/22/04 and 06/09/08. ** 01/22/04 and 09/12/06. 1,857,430 2,139,487
------------- -------------
APEX ANALYTIX HOLDING CORPORATION
A provider of audit recovery and fraud detection services and software to commercial and retail businesses in the U.S. and Europe.
12.5% Senior Subordinated Note due 2016 $ 1,012,500 04/28/09 855,082 1,032,750
Preferred Stock Series B (B) 1,623 shs. 04/28/09 162,269 187,115
Common Stock (B) 723 shs. 04/28/09 723 83,395
------------- -------------
1,018,074 1,303,260
------------- -------------
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8
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
ARROW TRU-LINE HOLDINGS, INC.
A manufacturer of hardware for residential and commercial overhead garage doors in North America.
12% Senior Subordinated Note due 2012 $ 984,209 05/18/05 $ 882,714 $ 836,577
Preferred Stock (B) 33 shs. 10/16/09 33,224 16,610
Common Stock (B) 263 shs. 05/18/05 263,298 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 69 shs. 05/18/05 59,362 --
------------- -------------
1,238,598 853,187
------------- -------------
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 2014 $ 1,207,902 06/30/06 1,152,964 1,207,902
Preferred Stock Class A (B) 465 shs. 06/30/06 141,946 82,820
Common Stock (B) 1 sh. 06/30/06 152 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 164 shs. 06/30/06 48,760 29,106
------------- -------------
1,343,822 1,319,828
------------- -------------
C D N T, INC.
A value-added converter and distributor of specialty pressure sensitive adhesives, foams, films, and foils.
10.5% Senior Secured Term Note due 2014 $ 429,070 08/07/08 420,489 402,755
12.5% Senior Subordinated Note due 2015 $ 429,070 08/07/08 394,529 383,292
Common Stock (B) 41,860 shs. 08/07/08 41,860 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 32,914 shs. 08/07/08 32,965 --
------------- -------------
889,843 786,047
------------- -------------
CAPITAL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging pharmaceutical products.
Common Stock (B) 55 shs. * 252 563,288
------------- -------------
*12/30/97 and 05/29/99.
CLOUGH, HARBOUR AND ASSOCIATES
An engineering service firm that is located in Albany, NY.
12.25% Senior Subordinated Note due 2015 $ 1,270,588 12/02/08 1,177,994 1,296,000
Preferred Stock (B) 147 shs. 12/02/08 146,594 178,576
------------- -------------
1,324,588 1,474,576
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
9
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
COEUR, INC.
A producer of proprietary, disposable power injection syringes.
12% Senior Subordinated Note due 2016 $ 642,857 10/10/08 $ 581,786 $ 655,714
Common Stock (B) 321 shs. 10/10/08 32,143 20,699
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 495 shs. 10/10/08 48,214 31,844
------------- -------------
662,143 708,257
------------- -------------
CONNECTICUT ELECTRIC, INC.
A supplier and distributor of electrical products sold into the retail and wholesale markets.
10% Senior Subordinated Note due 2014 (D) $ 771,051 01/12/07 719,275 462,631
Limited Liability Company Unit Class A (B) 82,613 uts. 01/12/07 82,613 --
Limited Liability Company Unit Class C (B) 59,756 uts. 01/12/07 59,756 --
Limited Liability Company Unit Class D (B) 671,525 uts. 05/03/10 -- --
Limited Liability Company Unit Class E (B) 1,102 uts. 05/03/10 -- --
------------- -------------
861,644 462,631
------------- -------------
CONNOR SPORT COURT INTERNATIONAL, INC.
A designer and manufacturer of outdoor and indoor synthetic sports flooring and other temporary flooring products.
Preferred Stock Series B-2 (B) 9,081 shs. 07/05/07 370,796 908,072
Preferred Stock Series C (B) 4,757 shs. 07/05/07 158,912 475,708
Common Stock (B) 380 shs. 07/05/07 4 133
Limited Partnership Interest (B) 6.88% int. * 103,135 --
------------- -------------
*08/12/04 and 01/14/05. 632,847 1,383,913
------------- -------------
COREPHARMA LLC
A manufacturer of oral dose generic pharmaceuticals targeted at niche applications.
12% Senior Subordinated Note due 2013 $ 1,350,000 08/04/05 1,309,431 1,350,000
Warrant, exercisable until 2013, to purchase
common stock at $.001 per share (B) 10 shs. 08/04/05 72,617 99,306
------------- -------------
1,382,048 1,449,306
------------- -------------
CRANE RENTAL CORPORATION
A crane rental company.
13% Senior Subordinated Note due 2015 $ 1,215,000 08/21/08 1,106,820 1,237,196
Common Stock (B) 135,000 shs. 08/21/08 135,000 5,826
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 72,037 shs. 08/21/08 103,143 3,109
------------- -------------
1,344,963 1,246,131
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
10
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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.
12.5% Senior Subordinated Note due 2016 $ 1,155,288 10/27/09 $ 1,002,074 $ 1,179,381
Preferred Stock PIK (B) 156 shs. 10/27/09 156,468 148,647
Preferred Stock Series A (B) 114 shs. 10/27/09 104,374 1
Common Stock (B) 38 shs. 10/27/09 38,244 36,328
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 28 shs. 10/27/09 25,735 --
------------- -------------
1,326,895 1,364,357
------------- -------------
DAVIS-STANDARD LLC
A manufacturer, assembler, and installer of a broad range of capital equipment that is used in the extrusion, conversion, and
processing of plastic materials.
12% Senior Subordinated Note due 2014 $ 978,261 10/30/06 930,711 951,572
Limited Partnership Interest (B) 0.97% int. 10/30/06 371,739 258,945
Warrant, exercisable until 2014, to purchase
preferred stock at $.01 per share (B) 26 shs. 10/30/06 26,380 32,531
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 18 shs. 10/30/06 18,000 --
------------- -------------
1,346,830 1,243,048
------------- -------------
DIVERSCO, INC./DHI HOLDINGS, INC.
A contract provider of janitorial and equipment maintenance services and temporary production labor to industrial customers.
Membership Interests of MM/Lincap
Diversco Investments Ltd. LLC (B) 13.57% int. 08/27/98 366,495 --
Preferred Stock (B) 1,293 shs. 12/14/01 1,093,491 1,294,210
Warrants, exercisable until 2011, to purchase common
stock of DHI Holdings, Inc. at $.01 per share (B) 6,676 shs. * 201,655 191,119
------------- -------------
*10/24/96 and 08/28/98. 1,661,641 1,485,329
------------- -------------
DUNCAN SYSTEMS, INC.
A distributor of windshields and side glass for the recreational vehicle market.
10% Senior Secured Term Note due 2013 $ 231,429 11/01/06 227,957 236,012
13% Senior Subordinated Note due 2014 $ 488,572 11/01/06 449,601 488,572
Common Stock (B) 102,857 shs. 11/01/06 102,857 90,967
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 32,294 shs. 11/01/06 44,663 28,561
------------- -------------
825,078 844,112
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
11
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
Common Stock (B) 3,656 shs. * $ 365,600 $ 633,831
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,077 shs. 10/30/03 98,719 186,649
------------- -------------
*10/30/03 and 01/02/04. 464,319 820,480
------------- -------------
E S P HOLDCO, INC.
A manufacturer of power protection technology for commercial office equipment, primarily supplying the office equipment dealer
network.
14% Senior Subordinated Note due 2015 $ 1,234,994 01/08/08 1,211,752 1,192,441
Common Stock (B) 349 shs. 01/08/08 174,701 39,137
------------- -------------
1,386,453 1,231,578
------------- -------------
E X C ACQUISITION CORPORATION
A manufacturer of pre-filled syringes and pump systems used for intravenous drug delivery.
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 11 shs. 06/28/04 40,875 32,339
------------- -------------
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.
12.5% Senior Subordinated Note due 2018 $ 950,000 02/01/10 823,900 957,350
Common Stock (B) 50 shs. 02/01/10 50,000 47,500
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 119 shs. 02/01/10 107,100 1
------------- -------------
981,000 1,004,851
------------- -------------
F C X HOLDINGS CORPORATION
A distributor of specialty/technical valves, actuators, accessories, and process instrumentation supplying a number of industrial,
high purity, and energy end markets in North America.
15% Senior Subordinated Note due 2015 $ 1,178,146 10/06/08 1,155,017 1,200,202
Preferred Stock (B) 2,298 shs. 10/06/08 229,804 106,837
Common Stock (B) 1,625 shs. 10/06/08 1,625 --
------------- -------------
1,386,446 1,307,039
------------- -------------
F H S HOLDINGS LLC
A national provider of customized disease management services to large self-insured employers.
12% Senior Subordinated Note due 2014 (D) $ 1,265,625 06/01/06 1,175,533 --
Limited Liability Company Units of Linden/FHS Holdings LLC (B) 84 uts. 06/01/06 84,368 --
Common Unit Class B (B) 734 uts. 06/01/06 64,779 --
------------- -------------
1,324,680 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
12
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
FLUTES, INC.
An independent manufacturer of micro fluted corrugated sheet material for the food and consumer products packaging industries.
10% Senior Secured Term Note due 2013 (D) $ 524,791 04/13/06 $ 516,919 $ 131,198
14% Senior Subordinated Note due 2014 (D) $ 317,177 04/13/06 283,220 --
------------- -------------
800,139 131,198
------------- -------------
GOLDEN COUNTY FOODS HOLDING, INC.
A manufacturer of frozen appetizers and snacks.
16% Senior Subordinated Note due 2015 $ 1,012,500 11/01/07 914,607 961,875
16% PIK Note due 2015 $ 230,898 12/31/08 223,202 219,353
8% Series A Convertible Preferred Stock, convertible into
fully diluted common shares (B) 77,643 shs. 11/01/07 77,643 28,015
------------- -------------
1,215,452 1,209,243
------------- -------------
H M HOLDING COMPANY
A designer, manufacturer, and importer of promotional and wood furniture.
7.5% Senior Subordinated Note due 2013 (D) $ 362,700 10/15/09 271,181 272,025
Preferred Stock (B) 21 shs. * 21,428 --
Preferred Stock Series B (B) 1,088 shs. 10/15/09 813,544 --
Common Stock (B) 180 shs. 02/10/06 180,000 --
Common Stock Class C (B) 296 shs. 10/15/09 -- --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 67 shs. 02/10/06 61,875 --
------------- -------------
* 09/18/07 and 06/27/08. 1,348,028 272,025
------------- -------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series A Preferred Units (B) 0.30% int. 07/21/94 91,867 --
------------- -------------
HOME DECOR HOLDING COMPANY
A designer, manufacturer and marketer of framed art and wall decor products.
12.5% Senior Subordinated Note due 2012 $ 1,081,731 * 1,017,527 1,081,731
Common Stock (B) 33 shs. * 33,216 46,673
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 106 shs. * 105,618 148,392
------------- -------------
* 06/30/04 and 08/19/04. 1,156,361 1,276,796
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
13
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
HOSPITALITY MINTS HOLDING COMPANY
A manufacturer of individually-wrapped imprinted promotional mints.
12% Senior Subordinated Note due 2016 $ 1,098,837 08/19/08 $ 1,016,628 $ 1,043,895
Common Stock (B) 251 shs. 08/19/08 251,163 44,165
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 65 shs. 08/19/08 60,233 11,416
------------- -------------
1,328,024 1,099,476
------------- -------------
INSURANCE CLAIMS MANAGEMENT, INC.
A third party administrator providing auto and property claim administration services for insurance companies.
Common Stock (B) 37 shs. 02/27/07 1,100 117,434
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 11 shs. 02/27/07 324 34,594
------------- -------------
1,424 152,028
------------- -------------
INTERNATIONAL OFFSHORE SERVICES LLC
A leading provider of marine transportation services, platform decomissioning, and salvage services to oil and gas producers in
the shallow waters of the Gulf of Mexico.
14.25% Senior Subordinated Secured Note due 2017 $ 1,350,000 07/07/09 1,217,417 1,366,575
Limited Liability Company Unit (B) 1,647 uts. 07/07/09 98,833 16
------------- -------------
1,316,250 1,366,591
------------- -------------
JASON, INC.
A diversified manufacturing company serving various industrial markets.
13% Senior Subordinated Note due 2010 (D) $ 510,187 08/04/00 449,086 25,509
Limited Partnership Interest of
Saw Mill Capital Fund II, L.P. (B) 1.30% int. 08/03/00 469,312 --
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 26,931 shs. 08/04/00 61,101 --
------------- -------------
979,499 25,509
------------- -------------
JUSTRITE MANUFACTURING ACQUISITION CO.
A manufacturer of safety products such as storage cabinets and containers.
12% Senior Subordinated Note due 2011 $ 843,750 12/15/04 825,790 843,750
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 594 shs. 12/15/04 53,528 107,129
------------- -------------
879,318 950,879
------------- -------------
K H O F HOLDINGS, INC.
A manufacturer of premium disposable tableware products serving both the foodservice and consumer channels.
Common Stock (B) 116,827 shs. 10/15/07 71,515 143,263
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
14
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
K N B HOLDINGS CORPORATION
A designer, manufacturer and marketer of products for the custom framing market.
15.5% Senior Subordinated Note due 2013 (D) $ 1,595,057 05/25/06 $ 1,398,385 $ 1,196,293
Common Stock (B) 71,053 shs. 05/25/06 71,053 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 43,600 shs. 05/25/06 37,871 --
------------- -------------
1,507,309 1,196,293
------------- -------------
K P I HOLDINGS, INC.
Pace Industries is the largest player in the U.S. non-automotive, non-ferrous die casting segment.
13% Senior Subordinated Note due 2014 (D) $ 1,115,217 07/16/08 1,042,077 947,934
Convertible Preferred Stock Series C (B) 29 shs. 06/30/09 29,348 --
Convertible Preferred Stock Series D (B) 13 shs. 09/17/09 12,958 --
Common Stock (B) 235 shs. 07/15/08 234,783 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 388 shs. * 50,836 --
------------- -------------
* 07/16/08 and 09/17/09. 1,370,002 947,934
------------- -------------
K W P I HOLDINGS CORPORATION
A manufacturer and distributor of vinyl windows and patio doors throughout the northwestern United States.
18% Senior Subordinated Note due 2014 $ 1,555,404 03/14/07 1,411,930 1,244,323
Common Stock (B) 123 shs. 03/13/07 123,000 --
Warrant, exercisable until 2019, to purchase
preferred stock at $.01 per share (B) 71 shs. 07/07/09 -- --
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B) 89 shs. 03/14/07 85,890 --
------------- -------------
1,620,820 1,244,323
------------- -------------
K-TEK HOLDING CORPORATION
A manufacturer of instrumentation for liquid and bulk solids level detection for process and storage tanks.
14% Senior Subordinated Note due 2015 $ 1,211,004 12/20/07 1,189,105 1,223,114
Preferred Stock (B) 192,314 shs. 12/20/07 192,314 234,958
Common Stock (B) 54,326 shs. 12/20/07 543 158,889
------------- -------------
1,381,962 1,616,961
------------- -------------
L H D EUROPE HOLDINGS, INC.
A non-carbonated beverage dispensing company focused on the foodservice industry.
Common Stock (B) 45 shs. 12/28/09 4,191 12,825
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
15
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE 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.
13% Senior Subordinated Note due 2016 $ 654,518 09/12/08 $ 606,708 $ 622,315
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 --
------------- -------------
673,565 622,315
------------- -------------
MAIL COMMUNICATIONS GROUP, INC.
A provider of mail processing and handling services, lettershop services, and commercial printing services.
12.5% Senior Subordinated Note due 2014 $ 516,177 05/04/07 483,072 516,177
Limited Liability Company Unit (B) 12,763 uts. * 166,481 176,190
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 1,787 shs. 05/04/07 22,781 24,668
------------- -------------
* 05/04/07 and 01/02/08. 672,334 717,035
------------- -------------
MANHATTAN BEACHWEAR HOLDING COMPANY
A designer and distributor of women's swimwear.
12.5% Senior Subordinated Note due 2018 $ 882,353 01/15/10 773,415 894,308
Common Stock (B) 118 shs. 01/15/10 117,647 111,768
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 104 shs. 01/15/10 94,579 1
------------- -------------
985,641 1,006,077
------------- -------------
MAVERICK ACQUISITION COMPANY
A manufacturer of capsules that cover the cork and neck of wine bottles.
7.03% Senior Secured Tranche A Note due 2010 (C) $ 103,032 09/03/04 103,032 102,599
12.5% Senior Secured Tranche B Note due 2011 $ 179,104 09/03/04 173,249 175,248
6.79% Senior Secured Revolver due 2011 (C) $ 29,105 09/03/04 29,105 28,704
Limited Partnership Interest (B) 4.48% int. 09/03/04 33,582 9,680
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 243 shs. 09/03/04 22,556 6,994
------------- -------------
361,524 323,225
------------- -------------
MEDSYSTEMS HOLDINGS LLC
A manufacturer of enteral feeding products, such as feeding tubes and other products related to assisted feeding.
13% Senior Subordinated Note due 2015 $ 619,129 08/29/08 553,854 631,511
Preferred Unit (B) 66 uts. 08/29/08 66,451 75,350
Common Unit Class A (B) 671 uts. 08/29/08 671 13,280
Common Unit Class B (B) 250 uts. 08/29/08 63,564 4,941
------------- -------------
684,540 725,082
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
16
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
MEGTEC HOLDINGS, INC.
A supplier of industrial and environmental products and services to a broad array of industries.
12% Senior Subordinated Note due 2016 $ 1,144,068 09/24/08 $ 1,048,910 $ 1,086,865
Preferred Stock (B) 56 shs. 09/24/08 54,040 --
Limited Partnership Interest (B) 0.74% int. 09/16/08 205,932 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 18 shs. 09/24/08 18,237 --
------------- -------------
1,327,119 1,086,865
------------- -------------
MICROGROUP, INC.
A manufacturer of precision parts and assemblies, and a value-added supplier of metal tubing and bars.
12% Senior Subordinated Note due 2013 (D) $ 1,421,795 * 1,370,596 1,208,526
Common Stock (B) 238 shs. * 238,000 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 87 shs. * 86,281 --
------------- -------------
* 08/12/05 and 09/11/06. 1,694,877 1,208,526
------------- -------------
MILWAUKEE GEAR COMPANY
A manufacturer of high-precision custom gears and gear drives used by original equipment manufacturers operating in a number of
industries.
13% Senior Subordinated Note due 2014 $ 1,246,154 07/21/08 1,182,295 1,121,539
Preferred Stock (B) 139 shs. 07/21/08 138,374 --
Common Stock (B) 9 shs. 07/21/08 10,000 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 6 shs. 07/21/08 5,510 --
------------- -------------
1,336,179 1,121,539
------------- -------------
MOMENTUM HOLDING CO.
A designer and supplier of upholstery fabric to commercial furniture manufacturers and architectural and design firms.
Limited Partnership Interest (B) 11.24% int. 08/04/06 56,198 129,076
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 586 shs. 08/04/06 56,705 134,547
------------- -------------
112,903 263,623
------------- -------------
MONESSEN HOLDING CORPORATION
A designer and manufacturer of a broad line of gas, wood, and electric hearth products and accessories.
14% Senior Subordinated Note due 2014 (D) $ 1,350,000 07/25/08 1,277,240 675,000
14% PIK Note due 2014 (D) $ 419,713 07/25/08 342,435 209,856
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 81 shs. 03/31/06 73,125 --
------------- -------------
1,692,800 884,856
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
17
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
NABCO, INC.
A producer of explosive containment vessels in the United States.
14% Senior Subordinated Note due 2014 (D) $ 330,882 02/24/06 $ 304,577 $ 165,441
Limited Liability Company Unit (B) 437 uts. * 436,984 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 68 shs. 02/24/06 19,687 --
------------- -------------
* 02/24/06 and 06/22/07. 761,248 165,441
------------- -------------
NAVIS GLOBAL
A designer, manufacturer, seller and servicer of finishing machinery for the knit and woven segments of the global textile industry.
10.75% Senior Secured Note due 2011 (D) $ 348,118 05/28/04 347,086 330,712
14% Senior Subordinated Note due 2014 (D) $ 764,921 05/28/04 660,453 --
------------- -------------
1,007,539 330,712
------------- -------------
NESCO HOLDINGS CORPORATION
A sales and leasing company that provides equipment to the electric utility, telecommunications, and various other industries.
12% Senior Secured Subordinated Note due 2015 $ 1,125,000 08/02/07 999,658 1,136,250
Common Stock (B) 225,000 shs. 08/02/07 225,000 258,207
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 63,191 shs. 08/02/07 102,842 72,517
------------- -------------
1,327,500 1,466,974
------------- -------------
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 2014 $ 810,000 02/02/07 745,713 613,691
Limited Partnership Interest of
Saw Mill PCG Partners LLC (B) 1.38% int. 02/01/07 539,990 --
Limited Liability Company Unit Class D of
Saw Mill PCG Partners LLC (B) 8 uts. * 8,147 4,075
Limited Liability Company Unit Class D-1 of
Saw Mill PCG Partners LLC (B) 51 uts. 09/30/09 50,509 25,262
Preferred Stock Class A (B) 1 sh. 12/18/08 726 360
Preferred Stock Class A-1 (B) 4 shs. 09/30/09 4,383 2,190
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 48 shs. 02/02/07 48,087 --
------------- -------------
* 12/18/08 and 09/30/09. 1,397,555 645,578
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
18
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
NORTHWEST MAILING SERVICES, INC.
A producer of promotional materials for companies that use direct mail as part of their customer retention and loyalty programs.
12% Senior Subordinated Note due 2016 $ 1,207,895 07/09/09 $ 1,013,866 $ 1,244,132
Limited Partnership Interest (B) 1,421, uts. 07/09/09 142,105 135,000
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 1,852 shs. 07/09/09 185,163 19
------------- -------------
1,341,134 1,379,151
------------- -------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the automotive industry.
10% Senior Secured Note due 2012 $ 464,286 01/28/02 464,286 441,072
15% Senior Subordinated Note due 2012 (D) $ 285,714 01/28/02 270,653 142,857
Convertible Preferred Stock A (B) 571 shs. 01/28/02 549,507 --
Common Stock (B) 178,571 shs. 01/28/02 178,571 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 138,928 shs. 01/28/02 92,597 --
------------- -------------
1,555,614 583,929
------------- -------------
O E C HOLDINGS CORPORATION
Headquartered in Dover Plains, New York, Oracle Elevator Company provides elevator maintenance, repair and modernization services.
13% Senior Subordinated Note due 2017 $ 444,445 06/04/10 404,450 446,157
Preferred Stock Series A (B) 554 shs. 06/04/10 55,354 52,586
Preferred Stock Series B (B) 311 shs. 06/04/10 31,125 3
Common Stock (B) 344 shs. 06/04/10 344 327
------------- -------------
491,273 499,073
------------- -------------
OAKRIVER TECHNOLOGY, INC.
Designs, engineers and assembles high precision automated process equipment for the medical device industry with a focus on
defibrilators and stents.
10% Senior Secured Note due 2012 $ 83,264 01/03/06 82,015 83,264
13% Senior Subordinated Note due 2013 $ 392,709 01/03/06 365,328 392,709
Common Stock (B) 184,176 shs. 01/03/06 184,176 131,787
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 43,073 shs. 01/03/06 35,900 30,821
------------- -------------
667,419 638,581
------------- -------------
OLYMPIC SALES, INC.
A boat retailer in Washington state, Oregon, California and British Columbia.
12% Senior Subordinated Note due 2010 (D) $ 511,000 08/07/98 511,000 76,650
12% Senior Subordinated Note due 2010 (D) $ 244,154 02/09/00 213,313 36,623
------------- -------------
724,313 113,273
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
19
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
ONTARIO DRIVE & GEAR LTD.
A manufacturer of all-wheel drive, off-road amphibious vehicles and related accessories.
Limited Liability Company Unit (B) 1,942 uts. 01/17/06 $ 302,885 $ 275,989
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 328 shs. 01/17/06 90,424 46,597
------------- -------------
393,309 322,586
------------- -------------
P A S HOLDCO LLC
An independent provider of maintenance, repair and overhaul services to the aerospace gas turbine engine and airframe markets.
14% Senior Subordinated Note due 2014 $ 1,242,817 07/03/06 1,195,300 1,255,245
Preferred Unit (B) 202 uts. 07/03/06 202,320 307,684
Preferred Unit (B) 36 uts. 07/03/06 36,420 55,387
Common Unit Class I (B) 78 uts. 07/03/06 -- 326,563
Common Unit Class L (B) 17 uts. 07/03/06 -- 68,989
------------- -------------
1,434,040 2,013,868
------------- -------------
P I I HOLDING CORPORATION
A manufacturer of plastic film and bags for the general industrial, medical, and food industries.
12% Senior Subordinated Note due 2013 $ 1,215,000 03/31/06 1,162,073 1,215,000
Preferred Stock (B) 19 shs. 03/31/06 174,492 242,261
Common Stock (B) 12 shs. 03/31/06 13,500 104,637
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 7 shs. 03/31/06 5,888 60,887
------------- -------------
1,355,953 1,622,785
------------- -------------
PACIFIC CONSOLIDATED HOLDINGS LLC
A manufacturer of rugged, mobile liquid and gaseous oxygen and nitrogen generating systems used in the global defense, oil and gas,
and medical sectors.
14% Senior Subordinated Note due 2012 $ 715,460 04/27/07 677,319 654,991
Limited Liability Company Unit (B) 928,962 uts. 04/27/07 33,477 --
------------- -------------
710,796 654,991
------------- -------------
PARADIGM PACKAGING, INC.
A manufacturer of plastic bottles and closures for the nutritional, pharmaceutical, personal care, and food packaging markets.
12% Senior Subordinated Note due 2011 $ 1,125,000 12/19/00 1,096,710 1,124,362
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 1.28% int. 12/21/00 140,625 145,465
------------- -------------
1,237,335 1,269,827
------------- -------------
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 --
Preferred Stock Series B (B) 7,059 shs. 05/22/09 290,050 --
Common Stock (B) 21,462 shs. 05/22/09 993,816 --
------------- -------------
1,342,900 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
20
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
POSTLE ALUMINUM COMPANY LLC
A manufacturer and distributor of aluminum extruded products.
15% Senior Subordinated Note due 2013 $ 810,000 06/03/10 $ 793,800 $ 811,904
3% Senior Subordinated PIK Note due 2014 (D) $ 1,163,700 10/02/06 1,066,355 --
Limited Liability Company Unit Class A (B) 733 uts. 10/02/06 270,000 --
Limited Liability Company Unit (B) 76 uts. 05/22/09 38,140 36,049
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 4,550 shs. 10/02/06 65,988 --
------------- -------------
2,234,283 847,953
------------- -------------
POWER SERVICES HOLDING COMPANY
A provider of industrial motor repair services, predictive and preventative maintenance, and performance improvement consulting
serving the petrochemical, mining, power generation, metals, and paper industries.
12% Senior Subordinated Note due 2016 $ 1,255,814 02/11/08 1,159,023 1,203,970
Limited Partnership Interest (B) 12.55% int. 02/11/08 94,092 11,438
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 700 shs. 02/11/08 88,723 22,543
------------- -------------
1,341,838 1,237,951
------------- -------------
PRECISION WIRE HOLDING COMPANY
A manufacturer of specialty medical wires that are used in non-elective minimally invasive surgical procedures.
14.25% Senior Subordinated Note due 2016 $ 1,362,978 11/12/09 1,224,645 1,378,737
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 109 shs. 11/12/09 107,970 1
------------- -------------
1,332,615 1,378,738
------------- -------------
QUALIS AUTOMOTIVE LLC
A distributor of aftermarket automotive brake and chassis products.
13% Senior Subordinated Note due 2013 $ 922,612 05/28/04 846,452 963,554
Common Stock (B) 187,500 shs. 05/28/04 187,500 273,145
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 199,969 shs. 05/28/04 199,969 291,309
------------- -------------
1,233,921 1,528,008
------------- -------------
R A J MANUFACTURING HOLDINGS LLC
A designer and manufacturer of women's swimwear sold under a variety of licensed brand names.
14.5% Senior Subordinated Note due 2014 $ 1,288,627 12/15/06 1,188,371 1,224,196
Limited Liability Company Unit (B) 1,497 uts. 12/15/06 149,723 46,939
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 2 shs. 12/15/06 69,609 22,150
------------- -------------
1,407,703 1,293,285
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
21
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
R E I DELAWARE HOLDING, INC.
An engineer and manufacturer of highly complex, close tolerance components, assemblies, tooling and custom automation equipment
primarily for aerospace, medical and defense/radar markets.
12% Senior Subordinated Note due 2016 $ 1,350,000 01/18/08 $ 1,306,541 $ 1,350,539
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 3 shs. 01/18/08 16,459 248
------------- -------------
1,323,000 1,350,787
------------- -------------
ROYAL BATHS MANUFACTURING COMPANY
A manufacturer and distributor of acrylic and cultured marble bathroom products.
12.5% Senior Subordinated Note due 2011 $ 562,500 11/14/03 546,623 557,209
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 74 shs. 11/14/03 65,089 63,968
------------- -------------
611,712 621,177
------------- -------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A manufacturer of vertical panel saws and routers for the woodworking industry.
Class B Common Stock (B) 846 shs. 06/02/99 146,456 156,850
------------- -------------
SAVAGE SPORTS HOLDING, INC.
A manufacturer of sporting firearms.
12% Senior Subordinated Note due 2012 $ 814,655 09/10/04 787,459 814,655
Preferred Stock Series A (B) 35,038 shs. 05/28/10 35,038 33,286
Common Stock (B) 324 shs. * 340,378 553,439
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 71 shs. 09/10/04 60,129 120,834
------------- -------------
* 09/10/04 and 10/05/07. 1,223,004 1,522,214
------------- -------------
SENCORE HOLDING COMPANY
A designer, manufacturer, and marketer of decoders, receivers and modulators sold to broadcasters, satellite, cable and telecom
operators for encoding/decoding analog and digital transmission video signals.
12.5% Senior Subordinated Note due 2014 $ 934,615 01/15/09 828,083 794,423
Common Stock (B) 69 shs. 01/15/09 69,231 5,112
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 149 shs. 01/15/09 149,084 11,012
------------- -------------
1,046,398 810,547
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
22
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
SMART SOURCE HOLDINGS LLC
A short-term computer rental company.
12% Senior Subordinated Note due 2015 $ 1,176,924 * $ 1,085,925 $ 1,143,796
Limited Liability Company Unit (B) 328 uts. * 334,371 174,616
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 83 shs. * 87,231 44,230
------------- -------------
* 08/31/07 and 03/06/08. 1,507,527 1,362,642
------------- -------------
SPARTAN FOODS HOLDING COMPANY
A manufacturer of branded pizza crusts and pancakes.
12.25% Senior Subordinated Note due 2017 $ 1,012,500 12/15/09 876,455 1,027,226
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 136 shs. 12/15/09 120,234 1
------------- -------------
996,689 1,027,227
------------- -------------
SPECIALTY COMMODITIES, INC.
A distributor of specialty food ingredients.
13.25% Senior Subordinated Note due 2016 $ 1,216,509 10/23/08 1,145,544 1,240,839
Common Stock (B) 15,882 shs. 10/23/08 158,824 143,728
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 5,852 shs. 10/23/08 53,285 52,959
------------- -------------
1,357,653 1,437,526
------------- -------------
STANTON CARPET HOLDING CO.
A designer and marketer of high and mid-priced decorative carpets and rugs.
12.13% Senior Subordinated Note due 2014 $ 1,185,366 08/01/06 1,129,815 1,122,735
Common Stock (B) 165 shs. 08/01/06 164,634 27,957
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 55 shs. 08/01/06 49,390 9,311
------------- -------------
1,343,839 1,160,003
------------- -------------
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 shs. 03/31/10 -- --
------------- -------------
SYNTERACT HOLDINGS CORPORATION
A provider of outsourced clinical trial management services to pharmaceutical and biotechnology companies.
14.5% Senior Subordinated Note due 2016 $ 1,376,910 09/02/08 1,292,394 1,381,316
Redeemable Preferred Stock Series A (B) 678 shs. 09/02/08 6,629 4,779
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 6,778 shs. 09/02/08 59,661 --
------------- -------------
1,358,684 1,386,095
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
23
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
T H I ACQUISITION, INC.
A machine servicing company providing value-added steel services to long steel products.
12% Senior Subordinated Note due 2016 $ 1,350,000 01/14/08 $ 1,276,383 $ 1,080,000
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 5 shs. 01/14/08 46,617 --
------------- -------------
1,323,000 1,080,000
------------- -------------
TELECORPS HOLDINGS, INC.
A provider of equipment and services to producers of television shows and motion pictures.
12.75% Senior Subordinated Note due 2016 $ 1,681,677 * 1,474,695 1,597,593
Common Stock (B) 143 shs. 09/02/09 5,823 --
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 4,187 shs. * 173,349 --
------------- -------------
* 05/20/09 and 09/02/09. 1,653,867 1,597,593
------------- -------------
TERRA RENEWAL LLC
A provider of wastewater residual management and required environmental reporting, permitting, nutrient management planning and
record keeping to companies involved in poultry and food processing.
12% Senior Subordinated Note due 2014 $ 664,062 * 639,292 530,320
6.79% Term Note due 2012 (C) $ 780,658 * 777,934 725,384
8.75% Term Note due 2012 (C) $ 826 * 826 770
Limited Partnership Interest of
Saw Mill Capital Fund V, LLC (B) 2.27% int. ** 85,245 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 41 shs. 04/28/06 33,738 --
------------- -------------
* 04/28/06 and 09/13/06. ** 03/01/05 and 10/10/08. 1,537,035 1,256,474
------------- -------------
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.
14.5% Senior Subordinated Note due 2013 (D) $ 1,185,366 10/26/07 1,113,016 --
Series A Preferred Stock (B) 219 shs. 10/26/07 219,203 --
------------- -------------
1,332,219 --
------------- -------------
TOTAL E & S, INC.
A manufacturer of a wide variety of equipment used in the oil and gas industry.
10.5% Senior Secured Term Note due 2013 $ 486,487 03/02/07 479,190 462,163
13% Senior Subordinated Note due 2014 (D) $ 341,971 03/02/07 280,347 170,986
------------- -------------
759,537 633,149
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
24
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
TRANSPAC HOLDING COMPANY
A designer, importer, and wholesaler of home decor and seasonal gift products.
14% Senior Subordinated Note due 2015 (D) $ 938,651 10/31/07 $ 873,498 $ 891,718
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 --
------------- -------------
1,030,308 891,718
------------- -------------
TRANSTAR HOLDING COMPANY
A distributor of aftermarket automotive transmission parts.
12% Senior Subordinated Note due 2014 $ 918,000 08/31/05 892,843 927,180
Common Stock (B) 571 shs. * 570,944 802,819
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 46 shs. 08/31/05 41,021 63,979
------------- -------------
* 08/31/05 and 04/30/07. 1,504,808 1,793,978
------------- -------------
TRANZONIC COMPANIES (THE)
A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom
supplies and sanitary care products.
13% Senior Subordinated Note due 2010 $ 1,356,000 02/05/98 1,340,791 1,356,000
Common Stock (B) 315 shs. 02/04/98 315,000 373,224
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 222 shs. 02/05/98 184,416 263,034
------------- -------------
1,840,207 1,992,258
------------- -------------
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.
8% Senior Subordinated Note due 2011 (D) $ 1,222,698 * 1,133,973 733,619
Preferred Stock Series B (B) 128 shs. 10/20/08 127,677 --
Common Stock (B) 393 shs. * 423,985 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 81 shs. * 84,650 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 558 shs. 10/20/08 -- --
------------- -------------
* 07/19/05 and 12/22/05. 1,770,285 733,619
------------- -------------
TRUSTILE DOORS, INC.
A manufacturer and distributor of interior doors.
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 3,060 shs. 04/11/03 36,032 27,457
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
25
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
U M A ENTERPRISES, INC.
An importer and wholesaler of home decor products.
15% Senior Subordinated Note due 2015 $ 945,838 02/08/08 $ 925,251 $ 933,068
Convertible Preferred Stock (B) 470 shs. 02/08/08 469,565 222,564
------------- -------------
1,394,816 1,155,632
------------- -------------
U-LINE CORPORATION
A manufacturer of high-end, built-in, undercounter ice making, wine storage and refrigeration appliances.
14.5% Senior Subordinated Note due 2012 $ 996,500 04/30/04 955,920 946,675
14.5% PIK Note due 2012 $ 144,168 10/06/09 123,047 136,960
Common Stock (B) 96 shs. 04/30/04 96,400 7,016
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 122 shs. 04/30/04 112,106 8,879
------------- -------------
1,287,473 1,099,530
------------- -------------
VISIONEERING, INC.
A designer and manufacturer of tooling and fixtures for the aerospace industry.
10.5% Senior Secured Term Loan due 2013 $ 458,824 05/17/07 451,942 453,640
13% Senior Subordinated Note due 2014 $ 370,588 05/17/07 340,367 364,335
18% PIK Convertible Preferred Stock (B) 21,361 shs. 03/13/09 41,440 33,152
Common Stock (B) 70,588 shs. 05/17/07 70,588 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 20,003 shs. 05/17/07 31,460 --
------------- -------------
935,797 851,127
------------- -------------
VITEX PACKAGING GROUP, INC.
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
10% Senior Subordinated PIK Note due 2011 $ 87,440 10/29/09 79,886 83,071
5% Senior Subordinated PIK Note due 2011 (D) $ 450,000 06/30/07 392,576 427,500
Class B Unit (B) 406,525 uts. 10/29/09 184,266 --
Class C Unit (B) 450,000 uts. 10/29/09 413,244 104,071
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. 1,396,173 614,642
------------- -------------
WAGGIN' TRAIN HOLDINGS LLC
A producer of premium quality meat dog treats.
14% Senior Subordinated Note due 2014 $ 1,186,865 11/15/07 1,162,805 1,198,733
Limited Liability Company Unit Class B (B) 224 uts. 11/15/07 223,757 270,095
Limited Liability Company Unit Class C (B) 224 uts. 11/15/07 -- 219,864
------------- -------------
1,386,562 1,688,692
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
26
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A)(Continued) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
WALLS INDUSTRIES, INC.
A provider of branded workwear and sporting goods apparel.
Limited Partnership Interest (B) 0.20% int. 07/12/04 $ 1,974 $ --
Common Stock (B) 2,133 shs. 12/21/07 -- --
------------- -------------
1,974 --
------------- -------------
WELLBORN FOREST HOLDING CO.
A manufacturer of semi-custom kitchen and bath cabinetry.
14.13% Senior Subordinated Note due 2014 $ 911,250 11/30/06 858,237 865,688
Common Stock (B) 101 shs. 11/30/06 101,250 15,726
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 51 shs. 11/30/06 45,790 7,851
------------- -------------
1,005,277 889,265
------------- -------------
WHEATON HOLDING CORPORATION
A distrtibutor and manufacturer of laboratory supply products and packaging.
13% Senior Subordinated Note due 2017 $ 1,000,000 06/08/10 909,644 1,000,000
Preferred Stock Series B (B) 703 shs. 06/08/10 70,308 7
Common Stock (B) 353 shs. 06/08/10 353 4
------------- -------------
980,305 1,000,011
------------- -------------
WORKPLACE MEDIA HOLDING CO.
A direct marketer specializing in providing advertisers with access to consumers in the workplace.
13% Senior Subordinated Note due 2015 $ 613,692 05/14/07 568,491 429,584
Limited Partnership Interest (B) 12.26% int. 05/14/07 61,308 --
Warrant, exercisable until 2015, to purchase
common stock at $.02 per share (B) 47 shs. 05/14/07 44,186 --
------------- -------------
673,985 429,584
------------- -------------
XALOY SUPERIOR HOLDINGS, INC.
A provider of melt processing components and ancillary equipment for both plastic injection molding and extrusion applications.
15.5% Senior Subordinated Note due 2015 (D) $ 1,229,741 09/08/08 1,203,293 614,870
Common Stock (B) 150 shs. 09/08/08 150,000 --
------------- -------------
1,353,293 614,870
------------- -------------
Total Private Placement Investments (E) 115,142,081 99,640,015
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
27
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
SHARES OR
INTEREST DUE PRINCIPAL MARKET
CORPORATE RESTRICTED SECURITIES:(A) (Continued) RATE DATE AMOUNT COST VALUE
------ -------- ------------ ------------ ------------
RULE 144A SECURITIES - 3.16%:
BONDS - 3.61%
Advanced Micro Devices, Inc. 8.125% 12/15/17 $ 190,000 $ 180,723 $ 188,575
Appleton Papers, Inc. 11.250 12/15/15 252,000 250,000 207,900
ArcelorMittal 6.125 06/01/18 500,000 519,681 522,940
Avis Budget Car Rental LLC 9.625 03/15/18 40,000 39,454 40,100
Cenveo Corporation 10.500 08/15/16 45,000 45,000 45,788
Coffeyville Resources LLC 9.000 04/01/15 70,000 69,658 69,300
Compucom Systems, Inc. 12.500 10/01/15 670,000 652,477 706,012
Eastman Kodak Co. 9.750 03/01/18 375,000 367,576 370,312
G F S I, Inc. (C) 10.500 06/01/11 358,000 343,948 266,710
Gannett Company, Inc. 9.375 11/15/17 60,000 59,149 63,450
International Lease Finance Corporation 8.625 09/15/15 75,000 73,853 71,063
JohnsonDiversey, Inc. 8.250 11/15/19 45,000 44,626 46,237
L B I Escrow Corporation 8.000 11/01/17 100,000 100,000 103,000
Magnachip Semiconductor 10.500 04/15/18 95,000 95,261 95,713
NBC Universal 5.150 04/30/20 500,000 499,295 521,249
Sealed Air Corporation 7.875 06/15/17 500,000 492,697 522,642
Sinclair Television Group, Inc. 9.250 11/01/17 200,000 194,848 202,000
ViaSystems, Inc. 12.000 01/15/15 100,000 96,644 108,000
------------ ------------
TOTAL BONDS 4,124,890 4,150,991
------------ ------------
CONVERTIBLE PREFERRED STOCK - 0.00%
ETEX Corporation (B) 194 179 --
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 179 --
------------ ------------
PREFERRED STOCK - 0.00%
TherOX, Inc. (B) 26 1,032 --
------------ ------------
TOTAL PREFERRED STOCK 1,032 --
------------ ------------
COMMON STOCK - 0.00%
Touchstone Health Partnership (B) 292 1,062 --
------------ ------------
TOTAL COMMON STOCK 1,062 --
------------ ------------
TOTAL RULE 144A SECURITIES 4,127,163 4,150,991
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $119,269,244 $103,791,006
------------ ------------
---------------------------------------------------------------------------------------------------------------------------------
28
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
INTEREST DUE PRINCIPAL MARKET
CORPORATE PUBLIC SECURITIES - 15.62%: (A) RATE DATE AMOUNT COST VALUE
------ -------- ------------ ------------ ------------
BONDS - 15.17%
ACCO Brands Corporation 10.625% 03/15/15 $ 45,000 $ 44,398 $ 48,825
Affinia Group, Inc. 9.000 11/30/14 25,000 24,250 25,125
Allegheny Technologies, Inc. 9.375 06/12/19 500,000 521,028 590,387
Allied Waste NA 7.125 05/15/16 500,000 506,218 536,250
American General Finance Corporation 6.500 09/15/17 250,000 215,000 195,000
C R H America, Inc. 5.300 10/15/13 500,000 418,430 537,491
Centurytel, Inc. 5.000 02/15/15 500,000 515,591 502,117
Citigroup, Inc. 5.500 04/11/13 500,000 437,890 519,751
Cytec Industries, Inc. 8.950 07/01/17 600,000 603,785 730,544
Equifax, Inc. 4.450 12/01/14 500,000 517,378 522,084
Exide Corporation 10.500 03/15/13 250,000 252,465 252,500
GATX Corporation 4.750 05/15/15 500,000 513,163 522,779
Gencorp, Inc. 9.500 08/15/13 130,000 130,000 131,463
General Electric Capital Corporation 5.500 01/08/20 500,000 498,050 528,378
Goldman Sachs Group, Inc. 4.750 07/15/13 500,000 418,645 522,037
Goodyear Tire & Rubber Co. 10.500 05/15/16 50,000 48,163 54,375
Headwaters, Inc. 11.375 11/01/14 45,000 44,580 45,450
Intelsat Burmuda Ltd. 9.250 06/15/16 690,000 713,892 684,825
International Game Technology 7.500 06/15/19 500,000 499,720 580,606
International Lease Finance Corporation 5.875 05/01/13 500,000 448,188 461,250
Iron Mountain, Inc. 8.750 07/15/18 500,000 512,345 516,250
Johnson Controls, Inc. 5.500 01/15/16 500,000 398,125 554,205
Kraft Foods, Inc. 5.375 02/10/20 500,000 517,040 533,918
Manitowoc Company, Inc. 7.125 11/01/13 100,000 100,000 96,500
Markwest Energy Operating Co. 6.875 11/01/14 35,000 27,789 33,600
Masco Corporation 7.125 03/15/20 350,000 349,993 339,703
Morgan Stanley 5.500 01/26/20 500,000 497,305 483,700
Nortek, Inc. 11.000 12/01/13 100,444 98,956 104,713
Owens Corning, Inc. 9.000 06/15/19 30,000 29,516 34,725
Qwest Diagnostic, Inc. 4.750 01/30/20 500,000 498,665 501,643
Rental Service Corporation 9.500 12/01/14 175,000 175,648 173,906
Sheridan Acquisition Corporation 10.250 08/15/11 225,000 222,001 222,469
Sprint Capital Corporation 6.900 05/01/19 440,000 405,225 398,200
Stewart & Stevenson LLC 10.000 07/15/14 735,000 754,806 668,850
Teck Resources Ltd. 10.750 05/15/19 30,000 28,581 36,759
Texas Industries, Inc. 7.250 07/15/13 35,000 35,000 33,862
The Valspar Corporation 7.250 06/15/19 500,000 501,425 591,945
Ticketmaster Entertainment, Inc. 10.750 07/28/16 250,000 250,000 269,375
---------------------------------------------------------------------------------------------------------------------------------
29
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
INTEREST DUE PRINCIPAL MARKET
CORPORATE PUBLIC SECURITIES (A)(Continued) RATE DATE AMOUNT COST VALUE
------ -------- ------------ ------------ ------------
Time Warner Cable, Inc. 5.000% 02/01/20 $ 500,000 $ 489,790 $ 511,321
Titan International, Inc. 8.000 01/15/12 70,000 70,000 72,800
Tube City IMS Corporation 9.750 02/01/15 1,000,000 989,124 967,500
Tyco International Group SA 8.500 01/15/19 500,000 457,495 574,206
Tyco International Group SA 6.550 10/01/17 125,000 124,996 161,040
United Components, Inc. 9.375 06/15/13 535,000 535,179 537,675
Verso Paper Holdings LLC 9.125 08/01/14 500,000 486,875 477,500
W P P Finance Corporation 5.875 06/15/14 500,000 507,666 542,493
------------ ------------
TOTAL BONDS 16,434,379 17,430,095
------------ ------------
COMMON STOCK - 0.45%
CKX, Inc. (B) 52,500 422,625 261,975
Directed Electronics, Inc. (B) 195,118 982,867 103,413
Intrepid Potash, Inc. (B) 185 5,920 3,620
ITC^DeltaCom, Inc. (B) 94,588 827,645 137,153
Nortek, Inc. (B) 100 1 4,200
Rue21, Inc. (B) 350 6,650 10,619
TOTAL COMMON STOCK 2,245,708 520,980
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 18,680,087 $ 17,951,075
------------ ------------
INTEREST DUE PRINCIPAL
SHORT-TERM SECURITIES: RATE/YIELD^ DATE AMOUNT COST MARKET VALUE
------ -------- ------------ ------------ ------------
COMMERCIAL PAPER - 1.09%
Pacific Gas & Electric 0.380% 07/09/10 $ 1,250,000 $ 1,249,894 $ 1,249,894
------------ ------------
TOTAL SHORT-TERM SECURITIES $ 1,249,894 $ 1,249,894
------------ ------------
TOTAL INVESTMENTS 107.02% $139,199,225 $122,991,975
============ ------------
Other Assets 3.93 4,517,341
Liabilities (10.95) (12,579,861)
------ ------------
TOTAL NET ASSETS 100.00% $114,929,455
====== ============
(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) Variable rate security; rate indicated is as of 06/30/10.
(D) Defaulted security; interest not accrued.
(E) Illiquid security. As of June 30, 2010, the values of these securities amounted to $99,640,015 or 86.70% of net assets.
^ Effective yield at purchase
PIK - Payment-in-kind
---------------------------------------------------------------------------------------------------------------------------------
30
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
AEROSPACE - 4.18% BUILDINGS & REAL ESTATE - 1.46%
A E Company, Inc. $ 1,810,391 K W P I Holdings Corporation $ 1,244,323
Gencorp, Inc. 131,463 Masco Corporation 339,703
P A S Holdco LLC 2,013,868 Owens Corning, Inc. 34,725
Visioneering, Inc. 851,127 Texas Industries, Inc. 33,862
------------ TruStile Doors, Inc. 27,457
4,806,849 ------------
------------ 1,680,070
AUTOMOBILE - 4.98% ------------
Exide Corporation 252,500 CHEMICAL, PLASTICS & RUBBER - 0.49%
Goodyear Tire & Rubber Co. 54,375 Capital Specialty Plastics, Inc. 563,288
Jason, Inc. 25,509 ------------
Johnson Controls, Inc. 554,205 CONSUMER PRODUCTS - 9.93%
Nyloncraft, Inc. 583,929 Aero Holdings, Inc. 1,673,279
Ontario Drive & Gear Ltd. 322,586 Bravo Sports Holding Corporation 1,319,828
Qualis Automotive LLC 1,528,008 Custom Engineered Wheels, Inc. 1,364,357
Titan International, Inc. 72,800 Eastman Kodak Co. 370,312
Transtar Holding Company 1,793,978 G F S I, Inc. 266,710
United Components, Inc. 537,675 Johnson Diversey, Inc. 46,237
------------ K N B Holdings Corporation 1,196,293
5,725,565 Manhattan Beachwear Holding Company 1,006,077
------------ Momentum Holding Co. 263,623
BEVERAGE, DRUG & FOOD - 6.97% R A J Manufacturing Holdings LLC 1,293,285
Eatem Holding Company 1,004,851 Royal Baths Manufacturing Company 621,177
Golden County Foods Holding, Inc. 1,209,243 The Tranzonic Companies 1,992,258
Hospitality Mints Holding Company 1,099,476 Walls Industries, Inc. --
Kraft Foods, Inc. 533,918 ------------
L H D Europe Holding, Inc. 12,825 11,413,436
Spartan Foods Holding Company 1,027,227 ------------
Specialty Commodities, Inc. 1,437,526 CONTAINERS, PACKAGING & GLASS - 3.90%
Waggin' Train Holdings LLC 1,688,692 Flutes, Inc. 131,198
------------ Maverick Acquisition Company 323,225
8,013,758 P I I Holding Corporation 1,622,785
------------ Paradigm Packaging, Inc. 1,269,827
BROADCASTING & ENTERTAINMENT - 2.15% Sealed Air Corporation 522,642
CKX, Inc. 261,975 Vitex Packaging Group, Inc. 614,642
NBC Universal 521,249 ------------
Sinclair Television Group, Inc. 202,000 4,484,319
Time Warner Cable, Inc. 511,321 ------------
WPP Finance Corporation 542,493 DISTRIBUTION - 1.87%
Workplace Media Holding Co. 429,584 Duncan Systems, Inc. 844,112
------------ F C X Holdings Corporation 1,307,039
2,468,622 ------------
------------ 2,151,151
------------
----------------------------------------------------------------------------------------------------------------------------------
31
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 7.98% ELECTRONICS - 0.49%
A H C Holdings Company, Inc. $ 1,519,917 Connecticut Electric, Inc. $ 462,631
Arrow Tru-Line Holdings, Inc. 853,187 Directed Electronics, Inc. 103,413
C D N T, Inc. 786,047 ------------
Headwaters, Inc. 45,450 566,044
K P I Holdings, Inc. 947,934 ------------
MEGTEC Holdings, Inc. 1,086,865 FINANCIAL SERVICES - 2.97%
Milwaukee Gear Company 1,121,539 American General Finance Corporation 195,000
Nortek, Inc. 108,913 Citigroup, Inc. 519,751
O E C Holdings Corporation 499,073 GATX Corporation 522,779
Postle Aluminum Company LLC 847,953 General Electric Capital Corporation 528,378
Truck Bodies & Equipment International 733,619 Goldman Sachs Group, Inc. 522,037
Xaloy Superior Holdings, Inc. 614,870 Highgate Capital LLC --
------------ International Lease Finance Corporation 532,313
9,165,367 L B I Escrow Corporation 103,000
------------ Morgan Stanley 483,700
DIVERSIFIED/CONGLOMERATE, SERVICE - 13.89% ------------
A S C Group, Inc. 1,371,824 3,406,958
A W X Holdings Corporation 765,737 ------------
ACCO Brands Corporation 48,825 HEALTHCARE, EDUCATION & CHILDCARE - 4.37%
Advanced Technologies Holdings 1,391,371 American Hospice Management Holding LLC 2,139,487
Affinia Group, Inc. 25,125 F H S Holdings LLC --
Apex Analytix Holding Corporation 1,303,260 Qwest Diagnostic, Inc. 501,643
C R H America, Inc. 537,491 Synteract Holdings Corporation 1,386,095
Clough, Harbour and Associates 1,474,576 Touchstone Health Partnership --
Crane Rental Corporation 1,246,131 Wheaton Holdings Corporation 1,000,011
Diversco, Inc./DHI Holdings, Inc. 1,485,329 ------------
Dwyer Group, Inc. 820,480 5,027,236
Equifax, Inc. 522,084 ------------
Insurance Claims Management, Inc. 152,028 HOME & OFFICE FURNISHINGS, HOUSEWARES &
Iron Mountain, Inc. 516,250 DURABLE CONSUMER PRODUCTS - 8.79%
Mail Communications Group, Inc. 717,035 Connor Sport Court International, Inc. 1,383,913
Nesco Holdings Corporation 1,466,974 H M Holding Company 272,025
Northwest Mailing Services, Inc. 1,379,151 Home Decor Holding Company 1,276,796
Pearlman Enterprises, Inc. -- Justrite Manufacturing Acquisition Co. 950,879
Tyco International Group 735,246 K H O F Holdings, Inc. 143,263
------------ Monessen Holding Corporation 884,856
15,958,917 Stanton Carpet Holding Co. 1,160,003
------------ Transpac Holdings Company 891,718
U M A Enterprises, Inc. 1,155,632
U-Line Corporation 1,099,530
Wellborn Forest Holding Co. 889,265
------------
10,107,880
------------
----------------------------------------------------------------------------------------------------------------------------------
32
MassMutual Participation Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
LEISURE, AMUSEMENT & ENTERTAINMENT - 2.06% NATURAL RESOURCES - 2.25%
International Game Technology $ 580,606 Appleton Papers, Inc. $ 207,900
Savage Sports Holding, Inc. 1,522,214 ArcelorMittal 522,940
Ticketmaster Entertainment, Inc. 269,375 Cenveo Corporation 45,788
------------ Cytec Industries, Inc. 730,544
2,372,195 Intrepid Potash, Inc. 3,620
------------ The Valspar Corporation 591,945
MACHINERY - 9.13% Verso Paper Holdings LLC 477,500
A S A P Industries LLC 634,728 ------------
Davis-Standard LLC 1,243,048 2,580,237
E S P Holdco, Inc. 1,231,578 ------------
K-Tek Holdings Corporation 1,616,961 OIL & GAS - 1.80%
M V I Holding, Inc. 622,315 Coffeyville Resources LLC 69,300
Manitowoc Company, Inc. 96,500 International Offshore Services LLC 1,366,591
Navis Global 330,712 Total E & S, Inc. 633,149
NetShape Technologies, Inc. 645,578 ------------
Pacific Consolidated Holdings LLC 654,991 2,069,040
Power Services Holding Company 1,237,951 ------------
R E I Delaware Holding, Inc. 1,350,787 PHARMACEUTICALS - 1.26%
Safety Speed Cut Manufacturing Company, Inc. 156,850 CorePharma LLC 1,449,306
Stewart & Stevenson LLC 668,850 ------------
------------ PUBLISHING/PRINTING - 0.25%
10,490,849 Gannett Company, Inc. 63,450
------------ Sheridan Acquisition Corporation 222,469
MEDICAL DEVICES/BIOTECH - 4.08% ------------
Coeur, Inc. 708,257 285,919
E X C Acquisition Corporation 32,339 ------------
ETEX Corporation -- RETAIL STORES - 0.26%
MedSystems Holdings LLC 725,082 Olympic Sales, Inc. 113,273
MicroGroup, Inc. 1,208,526 Rental Service Corporation 173,906
OakRiver Technology, Inc. 638,581 Rue21, Inc. 10,619
Precision Wire Holding Company 1,378,738 ------------
TherOX, Inc. -- 297,798
------------ ------------
4,691,523 TECHNOLOGY - 2.85%
------------ Advanced Micro Devices, Inc. 188,575
MINING, STEEL, IRON Compucom Systems, Inc. 706,012
& NON-PRECIOUS METALS - 2.33% Magnachip Semiconductor 95,713
Allegheny Technology, Inc. 590,387 Sencore Holding Company 810,547
T H I Acquisition, Inc. 1,080,000 Smart Source Holdings LLC 1,362,642
Teck Resources, Ltd. 36,759 ViaSystems, Inc. 108,000
Tube City IMS Corporation 967,500 ------------
------------ 3,271,489
2,674,646 ------------
------------
----------------------------------------------------------------------------------------------------------------------------------
33
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2010
(Unaudited)
Fair Value/
Industry Classification Market Value
------------------------------------------------------------
TELECOMMUNICATIONS - 3.47%
All Current Holding Company $ 667,866
Centurytel, Inc. 502,117
Intelsat Bermuda Ltd. 684,825
ITC^DeltaCom, Inc. 137,153
Sprint Capital Corporation 398,200
Sundance Investco LLC --
Telecorps Holdings, Inc. 1,597,593
------------
3,987,754
------------
TRANSPORTATION - 0.18%
Avis Budget Car Rental LLC 40,100
NABCO, Inc. 165,441
------------
205,541
------------
UTILITIES - 1.12%
Markwest Energy Operating Co. 33,600
Pacific Gas & Electric 1,249,894
------------
1,283,494
------------
WASTE MANAGEMENT/POLLUTION - 1.56%
Allied Waste NA 536,250
Terra Renewal LLC 1,256,474
Torrent Group Holdings, Inc. --
------------
1,792,724
------------
Total Investments - 107.02% $122,991,975
============
See Notes to Consolidated Financial Statements
----------------------------------------------------------------------------------------------------------------------------------
34
MassMutual Participation Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. HISTORY
MassMutual Participation Investors (the "Trust") was organized as a
Massachusetts business trust under the laws of the Commonwealth of
Massachusetts pursuant to a Declaration of Trust dated April 7, 1988. The
Trust is a diversified closed-end management investment company. Babson
Capital Management LLC ("Babson Capital"), a wholly-owned indirect
subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"),
acts as its investment adviser. The Trust's investment objective is to
maximize total return by providing a high level of current income, the
potential for growth of income, and capital appreciation. The Trust's
principal investments are privately placed, below-investment grade,
long-term debt obligations purchased directly from their issuers, which
tend to be smaller companies. At least half of these investments normally
include equity features such as common stock, warrants, conversion rights,
or other equity features that provide the Trust with the opportunity to
realize capital gains. The Trust will also invest in publicly traded debt
securities (including high yield securities), again with an emphasis on
those with equity features, and in convertible preferred stocks and,
subject to certain limitations, readily marketable equity securities.
Below-investment grade or high yield securities have predominantly
speculative characteristics with respect to the capacity of the issuer to
pay interest and repay capital. In addition, the Trust may temporarily
invest in high quality, readily marketable securities.
On January 27, 1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary of the Trust ("MMPI Subsidiary Trust") for the
purpose of holding certain investments. The results of the MMPI Subsidiary
Trust are consolidated in the accompanying financial statements. Footnote
2.D below discusses the Federal tax consequences of the MMPI Subsidiary
Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of its consolidated 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
the 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 public offering for which a registration statement
is in effect under the Securities Act of 1933, as amended (the "1933 Act")
or pursuant to a transaction that is exempt from registration under the
1933 Act.
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 Trust's Board of Trustees (the "Trustees"). Each
restricted security is valued by the Trustees at the time of its
acquisition and at least quarterly thereafter. The Trustees have
established guidelines to aid in the valuation of each security.
Generally, restricted securities are initially valued at cost or less at
the time of acquisition by the Trust. Values greater or less than cost are
used thereafter for restricted securities in appropriate circumstances.
Among the factors ordinarily considered are the existence of restrictions
upon the sale of a security held by the Trust; an estimate of the
existence and the 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 for purchase; 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, as amended (the
"1940 Act"). 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 1933
Act and any other developments which are likely to increase the
probability that the securities may be publicly sold by the Trust without
restriction.
The Trustees meet at least once each quarter to approve the value of 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 or of Babson
Capital. In making valuations,
--------------------------------------------------------------------------------
35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
the Trustees will consider reports by Babson Capital analyzing each
portfolio security in accordance with the relevant factors referred to
above. Babson Capital has agreed to provide such reports to the Trust at
least quarterly.
The consolidated financial statements include private placement restricted
securities valued at $99,640,015 (86.70% of net assets) as of June 30,
2010 whose values have been estimated by the 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 Rule 144A restricted securities and corporate public
securities are stated at the last reported sales price or at prices based
upon quotations obtained from brokers and dealers as of June 30, 2010,
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.
In accordance with the authoritative guidance on fair value measurements
and disclosures under accounting principles generally accepted in the
United States of America ("U.S. GAAP"), the Trust discloses the fair value
of its investments in a hierarchy that prioritizes the inputs to valuation
techniques used to measure the fair value. The hierarchy gives the highest
priority to valuations based upon unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the
lowest priority to valuations based upon unobservable inputs that are
significant to the valuation (level 3 measurements). The guidance
establishes three levels of the fair value hierarchy 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 inputs and methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Trust's net
assets as of June 30, 2010:
ASSETS: TOTAL LEVEL 1 LEVEL 2 LEVEL 3
---------------------------------------------------------------------------------------------------------------
Restricted Securities
Bonds $ 87,929,664 $ -- $ 4,150,991 $83,778,673
Common Stock 7,736,501 -- -- 7,736,501
Preferred Stock 4,447,172 -- -- 4,477,172
Partnerships and LLCs 3,647,669 -- -- 3,647,669
Public Securities
Bonds 17,430,095 -- 17,430,095 --
Common Stock 520,980 516,780 4,200 --
Preferred Stock -- -- -- --
Short-term Securities 1,249,894 -- 1,249,894 --
---------------------------------------------------------------------------------------------------------------
TOTAL $122,991,975 $516,780 $22,835,180 $99,640,015
Following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
UNREALIZED
TOTAL GAINS PURCHASES, GAINS & LOSSES
BEGINNING OR LOSSES SALES, ISSUANCES TRANSFERS ENDING IN NET INCOME
BALANCE (REALIZED/ & SETTLEMENTS IN AND/OR BALANCE AT FROM ASSETS
ASSETS: AT 12/31/2009 UNREALIZED) (NET) OUT OF LEVEL 3 06/30/2010 STILL HELD
------------------------------------------------------------------------------------------------------------------------------------
Restricted Securities
Bonds $81,465,949 $ 977,224 $1,335,500 $ -- $83,778,673 $ 26,785
Common Stock 7,767,378 503,842 (534,719) -- 7,736,501 300,934
Preferred Stock 3,468,130 1,034,542 (25,500) -- 4,477,172 815,339
Partnerships and LLCs 3,536,247 89,775 21,647 -- 3,647,669 89,775
------------------------------------------------------------------------------------------------------------------------------------
$96,237,704 $2,605,383 $ 796,928 $ -- $99,640,015 $1,232,833
--------------------------------------------------------------------------------
36
MassMutual Participation Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
B. ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date. Interest income is recorded on
the accrual basis, including the amortization of premiums and accretion of
discounts on bonds held using the yield-to-maturity method. The Trust does
not accrue income when payment is delinquent and when management believes
payment is questionable. 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.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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:
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 that Trustees either designate the net
realized long-term gains as undistributed and pay the Federal capital
gains taxes thereon, or distribute all or a portion of such net gains.
The Trust is taxed as a regulated investment company and is therefore
limited as to the amount of non-qualified income that it may receive as
the result of operating a trade or business, e.g. the Trust's pro rata
share of income allocable to the Trust by a partnership operating company.
The Trust's violation of this limitation could result in the loss of its
status as a regulated investment company, thereby subjecting all of its
net income and capital gains to corporate taxes prior to distribution to
its shareholders. The Trust, from time-to-time, identifies investment
opportunities in the securities of entities that could cause such trade or
business income to be allocable to the Trust. The MMPI Subsidiary Trust
(described in Footnote 1 above) was formed in order to allow investment in
such securities without adversely affecting the Trust's status as a
regulated investment company.
The MMPI Subsidiary Trust is not taxed as a regulated investment company.
Accordingly, prior to the Trust receiving any distributions from the MMPI
Subsidiary Trust, all of the MMPI Subsidiary Trust's taxable income and
realized gains, including non-qualified income and realized gains, is
subject to taxation at prevailing corporate tax rates. As of June 30,
2010, the MMPI Subsidiary Trust has a deferred tax liability of $504.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of the existing assets and liabilities and their
respective tax basis. As of June 30, 2010, the MMPI Subsidiary Trust has a
deferred tax liability of $76,208.
Beginning with the 2009 annual financial statements, the Trust recognizes
a tax benefit from an uncertain position only if it is more likely than
not that the position is sustainable, based solely on its technical merits
and consideration of the relevant taxing authority's widely understood
administrative practices and precedents. If this threshold is met, the
Trust measures the tax benefit as the largest amount of benefit that is
greater than fifty percent likely of being realized upon ultimate
settlement. The Trust has evaluated and determined that the tax positions
did not have a material effect on the Trust's financial position and
results of operations for the six months ended June 30, 2010.
E. DISTRIBUTIONS TO SHAREHOLDERS:
The Trust records distributions to shareholders from net investment income
and net realized gains, if any, on the ex-dividend date. The Trust's net
investment income dividend is declared four times per year, in April,
July, October, and December. The Trust's net realized capital gain
distribution, if any, is declared in December.
F. EXPENSE REDUCTION:
Citibank, N.A. ("Citibank") serves as custodian to the Trust. Pursuant to
the custodian agreement, Citibank receives a fee reduced by credits on
cash balances the Trust maintains with Citibank. All credit balances, if
any, used to reduce the Trust's custodian fees are reported as fees paid
indirectly on the Statement of Operations. For the six months ended June
30, 2010, there were no credit balances used to reduce custodian fees.
3. INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES CONTRACT
A. SERVICES:
Under an Investment Advisory and Administrative Services Contract (the
"Contract") with the Trust, Babson Capital has agreed to use its best
efforts to present to the Trust a continuing and suitable investment
program consistent with the investment objectives and policies of the
Trust. Babson Capital 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. Under the
Contract, Babson Capital also provides administration of the
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37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
day-to-day operations of the Trust and provides the Trust with office
space and office equipment, accounting and bookkeeping services, and
necessary executive, clerical and secretarial personnel for the
performance of the foregoing services.
B. FEE:
For its services under the Contract, Babson Capital is paid a quarterly
investment advisory fee equal to 0.225% of the value of the Trust's net
assets as of the last business day of each fiscal quarter, an amount
approximately equivalent to 0.90% on an annual basis. A majority of the
Trustees, including a majority of the Trustees who are not interested
persons of the Trust or of Babson Capital, approve the valuation of the
Trust's net assets as of such day.
C. BASIS FOR BOARD RENEWAL OF CONTRACT:
At a meeting of the Board of Trustees held on April 16, 2010, the Trustees
(including a majority of the Trustees who are not "interested persons" of
the Trust or Babson Capital) unanimously approved a one year continuance
of the Contract.
Prior to the meeting, the Board of Trustees requested and received from
Ropes & Gray LLP, counsel to the Trust, a memorandum describing the Board
of Trustees' legal responsibilities in connection with its review and
reapproval of the Contract. The Board of Trustees also requested and
received from Babson Capital extensive written and oral information
regarding among other matters: the principal terms of the Contract; the
reasons why Babson Capital was proposing the continuance of the Contract;
Babson Capital and its personnel; the Trust's investment performance,
including comparative performance information; the nature and quality of
the services provided by Babson Capital to the Trust; financial strength
of Babson Capital; the fee arrangement between Babson Capital and the
Trust; fee and expense information, including comparative fee and expense
information; profitability of the advisory arrangement to Babson Capital;
and "fallout" benefits to Babson Capital resulting from the Contract.
Among other things, the Trustees discussed and considered with management
(i) the aforementioned guidance provided by Ropes & Gray LLP and the
information provided by Babson Capital prior to the meeting, and ((ii) the
reasons Babson Capital put forth in support of its recommendation that the
Trustees approve the continuance of the Contract. These considerations are
summarized below.
NATURE, EXTENT AND QUALITY OF SERVICES TO BE PROVIDED BY BABSON CAPITAL TO
THE TRUST
In evaluating the scope and quality of the services provided by Babson
Capital to the Trust, the Trustees considered, among other factors: (i)
the scope of services required to be provided by Babson Capital to the
Trust under the Contract; (ii) Babson Capital's ability to find and
negotiate private placement securities having equity features that are
consistent with the stated investment objectives of the Trust; (iii) the
experience and quality of Babson Capital's staff; (iv) the strength of
Babson Capital's financial condition; (v) the nature of the private
placement market compared to public markets (including the fact that
finding, analyzing, negotiating and servicing private placement securities
is more labor-intensive than buying and selling public securities and the
administration of private placement securities is more extensive,
expensive, and requires greater time and expertise than a portfolio of
only public securities); (vi) the potential advantages afforded to the
Trust by its ability to co-invest in negotiated private placements with
MassMutual and its affiliates; and (vii) the expansion of the scope of
services provided by Babson Capital as a result of recent regulatory and
legislative initiatives that have required increased legal, compliance and
business attention and diligence. Based on such considerations, the
Trustees concluded that, overall, they are satisfied with the nature,
extent and quality of services provided by Babson Capital, and expected to
be provided in the future, under the renewed Contract.
INVESTMENT PERFORMANCE
The Trustees also examined the Trust's short-term, intermediate-term, and
long-term performance as compared against various benchmark indices
presented at the meeting. In addition, the Trustees considered comparisons
of the Trust's performance with the performance of (i) selected closed-end
investment companies and funds that may invest in private placement
securities and/or bank loans; (ii) selected business development companies
with comparable types of investments; and (iii) investment companies
included in the Lipper closed-end bond universe. It was acknowledged that,
while such comparisons are helpful in judging performance, they are not
directly comparable in terms of types of investments due to the fact that
business development companies often report returns based on market value,
which is affected by factors other than the performance of the underlying
portfolio investments. Based on these considerations and the detailed
performance information provided to the Trustees at the regular Board
meetings each quarter, the Trustees concluded that the Trust's absolute
and relative performance over time have been sufficient to warrant renewal
of the Contract.
ADVISORY FEE/COST OF SERVICES PROVIDED AND PROFITABILITY/ MANAGER'S
"FALL-OUT" BENEFITS
In connection with the Trustees' consideration of the advisory fee paid by
the Trust to Babson Capital under the Contract, Babson Capital noted that
it was unaware of any registered closed-end investment companies that are
directly comparable to the Trust in terms of the types of investments and
percentages invested in private placement securities (which require more
extensive advisory and administrative services than a portfolio of
publicly traded securities, as previously discussed) other than MassMutual
Corporate Investors, which also is advised
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38
MassMutual Participation Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
by Babson Capital. Under the terms of its Investment Services Contract,
MassMutual Corporate Investors is charged a quarterly investment advisory
fee of 0.3125% of net asset value as of the end of each quarter, which is
approximately equal to 1.25% annually. In considering the fee rate
provided in the Contract, the Trustees noted the advisory fee charged by
Babson Capital to Tower Square Capital Partners, L.P., Tower Square
Capital Partners II, L.P., and Tower Square Capital Partners III, L.P.,
each a private mezzanine debt fund also managed by Babson Capital, and
that the fee the Trust charged compares favorable.
At the request of the Trustees, Babson Capital provided information
concerning the profitability of Babson Capital's advisory relationship
with the Trust. The Trustees also considered the non-economic benefits
Babson Capital and its affiliates derived from its relationship with the
Trust, including the reputational benefits derived from having the Trust
listed on the New York Stock Exchange, and the de minimis amount of
commissions resulting from the Trust's portfolio transactions used by
Babson Capital for third-party soft dollar arrangements. The Trustees
recognized that Babson Capital should be entitled to earn a reasonable
level of profit for services provided to the Trust and, based on their
review, concluded that they were satisfied that Babson Capital's
historical level of profitability from its relationship with the Trust was
not excessive and that the advisory fee structure under the Contract is
reasonable.
ECONOMIES OF SCALE
Finally, the Trustees considered the concept of economies of scale and
possible advisory fee reductions if the Trust were to grow in assets.
Given that the Trust is not continuously offering shares, such growth
comes principally from retained net realized gain on investments and
dividend reinvestment. The Trustees also examined the breakpoint features
of selected competitive funds and noted that the minimum starting point
for fee reductions in those funds was at least $200 million, whereas the
Trust's current net assets are near $115 million. The Trustees concluded
that the absence of breakpoints in the fee schedule under the Contract was
currently acceptable given the Trust's current size and closed-end fund
structure.
4. SENIOR SECURED INDEBTEDNESS
MassMutual holds the Trust's $12,000,000 Senior Fixed Rate Convertible
Note (the "Note") issued by the Trust in 1995. The Note, as amended, is
due December 13, 2011 and accrues interest at 5.80% per annum. MassMutual,
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.
For the six months ended June 30, 2010, the Trust incurred total interest
expense on the Note of $348,000.
The Trust may redeem the Note, in whole or in part, at the principal
amount proposed to be redeemed together with the accrued and unpaid
interest thereon through the redemption date plus a Make Whole Premium.
The Make Whole Premium equals the excess of (i) the present value of the
scheduled payments of principal and interest which the Trust would have
paid but for the proposed redemption, discounted at the rate of interest
of U.S. Treasury obligations whose maturity approximates that of the Note
plus 0.50% over (ii) the principal of the Note proposed to be redeemed.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE SIX
MONTHS ENDED
06/30/2010
------------
PROCEEDS
COST OF FROM
INVESTMENTS SALES OR
ACQUIRED MATURITIES
---------- ----------
Corporate restricted securities $9,108,935 $7,204,597
Corporate public securities 6,252,863 1,610,910
The aggregate cost of investments is substantially the same for financial
reporting and Federal income tax purposes as of June 30, 2010. The net
unrealized depreciation of investments for financial reporting and Federal
tax purposes as of June 30, 2010 is $16,283,458 and consists of
$10,655,226 appreciation and $26,938,684 depreciation.
Net unrealized depreciation of investments on the Statement of Assets and
Liabilities reflects the balance net of a deferred tax accrual of $76,208
on net unrealized gains on the MMPI Subsidiary Trust.
--------------------------------------------------------------------------------
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS
MARCH 31, 2010
AMOUNT PER SHARE
---------- ----------
Investment income $2,911,112
Net investment income 2,361,286 $0.24
Net realized and unrealized
gain on investments (net of taxes) 142,746 0.01
JUNE 30, 2010
AMOUNT PER SHARE
---------- ----------
Investment income $3,007,150
Net investment income 2,444,394 $0.24
Net realized and unrealized
gain on investments (net of taxes) 3,134,736 0.32
7. RESULTS OF SHAREHOLDER MEETING
The Annual Meeting of Shareholders was held on Friday, April 16, 2010. The
Shareholders were asked to vote to re-elect as trustees Donald E. Benson,
Donald Glickman, and Robert E. Joyal for three year terms. The
Shareholders approved the proposals. The Trust's other Trustees, William
J. Barrett, Michael H. Brown, Martin T. Hart, Corine T. Norgaard, Clifford
M. Noreen, and Maleyne M. Syracuse continued to serve their respective
terms following the April 16, 2010 Annual Shareholders Meeting. The
results of the Shareholder voting are set forth below.
% OF SHARES
SHARES FOR WITHHELD TOTAL VOTED FOR
----------------------------------------------------------------------
Donald E. Benson
8,349,469 262,945 8,612,414 83.59%
Donald Glickman
8,322,201 290,213 8,612,414 83.31%
Robert E. Joyal
8,386,066 226,348 8,612,414 83.95%
8. BY-LAWS AMENDMENT
On April 16, 2010, the Board of Trustees approved an amendment to the
By-Laws of the Trust to include an advance notice provision that would
require shareholders seeking to nominate Trustee candidates or bring
business before an annual meeting to provide timely notice to the Trust,
consistent with certain specified requirements, of their intent to do so.
--------------------------------------------------------------------------------
40
MassMutual Participation Investors
MEMBERS OF THE
BOARD OF TRUSTEES
Donald Glickman
Robert E. Joyal
William J. Barrett
Michael H. Brown*
Donald E. Benson*
Dr. Corine T. Norgaard*
Clifford M. Noreen
Martin T. Hart
Maleyne M. Syracuse
*Member of the Audit Committee
OFFICERS
Clifford M. Noreen
Chairman
Michael L. Klofas
President
James M. Roy
Vice President & Chief
Financial Officer
Patricia J. Walsh
Vice President, Secretary
& Chief Legal Officer
Jill A. Fields
Vice President
Michael P. Hermsen
Vice President
Mary Wilson Kibbe
Vice President
Richard E. Spencer, II
Vice President
Daniel J. Florence
Treasurer
John T. Davitt, Jr.
Comptroller
Melissa M. LaGrant
Chief Compliance Officer
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
MassMutual Participation Investors offers a Dividend Reinvestment and Cash
Purchase Plan (the "Plan"). The Plan provides a simple and automatic 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. The dividends of each
shareholder will be automatically reinvested in the Trust by Shareholder
Financial Services Inc., the Transfer Agent, in accordance with the Plan, unless
such shareholder elects not to participate by providing written notice to the
Transfer Agent. A shareholder may terminate his or her participation by
notifying the Transfer Agent in writing.
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 $100 nor more than $5,000 per quarter. Cash
contributions must be received by the Transfer Agent at least five days (but no
more then 30 days) before the payment date of a dividend or distributions.
Whenever the Trust declares a dividend payable in cash or shares, the Transfer
Agent, acting on behalf of each participating shareholder, will take the
dividend in shares only if the net asset value is lower than the market price
plus an estimated brokerage commission as of the close of business on the
valuation day. The valuation day is the last day preceding the day of dividend
payment.
When the dividend is to be taken in shares, the number of shares to be received
is determined by dividing the cash dividend by the net asset value as of the
close of business on the valuation date or, if greater than net asset value, 95%
of the closing share price. If the net asset value of the shares is higher than
the market value plus an estimated commission, the Transfer Agent, consistent
with obtaining the best price and execution, will buy shares on the open market
at current prices promptly after the dividend payment date.
The reinvestment of dividends does not, in anyway, 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., Transfer Agent for MassMutual Participation Investors' Dividend
Reinvestment and Cash Purchase Plan, P.O. Box 173673, Denver, CO 80217-3673.
MASSMUTUAL
PARTICIPATION INVESTORS
PI5075
ITEM 2. CODE OF ETHICS.
Not applicable for this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable for this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
A schedule of investments for the Registrant is included as part of
this report to shareholders under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable for this filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this filing. There have been no changes in any of the
Portfolio Managers identified in the Registrant's most recent annual
report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable for this filing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable for this filing.
ITEM 11. 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-CSR is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange
Commission's rules and forms.
(b) There were no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act)
during the Registrant's second fiscal quarter that have
materially affected, or are reasonably likely to materially
affect, the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF
DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT
INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF
AN EXHIBIT.
None.
(a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE
30a-2 UNDER THE ACT.
Attached hereto as EX-99.31.1
Attached hereto as EX-99.31.2
(a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1
UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD
COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR
MORE PERSONS.
Not applicable for this filing.
(b) CERTIFICATIONS PURSUANT TO RULE 302-2(b) UNDER THE ACT.
Attached hereto as EX-99.32
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): MassMutual Participation Investors
----------------------------------
By: /s/ Michael L. Klofas
----------------------------------
Michael L. Klofas, President
----------------------------------
Date: September 8, 2010
----------------------------------
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: /s/ Michael L. Klofas
----------------------------------
Michael L. Klofas, President
----------------------------------
Date: September 8, 2010
----------------------------------
By: /s/ James M. Roy
----------------------------------
James M. Roy, Vice President and
Chief Financial Officer
----------------------------------
Date: September 8, 2010
----------------------------------