Morgan Stanley Direct Lending Fund Announces December 31, 2023 Financial Results and Declares First Quarter 2024 Dividend of $0.50 per Share
“MSDL generated record performance to complete 2023, positioning the Company well for its debut to the public markets,” said
QUARTERLY HIGHLIGHTS
-
Net investment income of
$55.5 million , or$0.67 per share; -
Net asset value of
$20.67 per share, an increase from$20.57 per share as ofSeptember 30, 2023 ; -
Debt-to-equity was 0.87x as of
December 31, 2023 , as compared to 1.16x as ofSeptember 30, 2023 ; -
New investment commitments of
$242.9 million , fundings of$253.9 million and sales and repayments of$192.2 million , resulting in net funded portfolio increase of$61.6 million ; and -
The Company’s Board of Directors (the “Board”) declared a regular dividend of
$0.50 per share and a special dividend of$0.10 per share. The dividend was paid onJanuary 25, 2024 to stockholders of record as ofDecember 28, 2023 .
SELECTED FINANCIAL HIGHLIGHTS
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For the Quarter Ended |
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Net investment income per share |
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Net realized and unrealized gains per share |
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Earnings per share |
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Regular dividend per share |
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Special dividend per share |
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As of |
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($ in thousands, except per share information) |
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Investments, at fair value |
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Total debt outstanding, at principal |
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Net assets |
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Net asset value per share |
|
|
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Debt to equity |
0.87x |
1.16x |
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Net debt to equity |
0.83x |
1.11x |
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RESULTS OF OPERATIONS
Total investment income for the fourth quarter ended
Total operating expenses for the quarter ended
Net investment income for the quarter ended
For the three months ended
PORTFOLIO AND INVESTMENT ACTIVITY
As of
|
|
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($ in thousands) |
Cost |
|
Fair Value |
|
% of Total
|
Cost |
|
Fair Value |
|
% of Total
|
||||||
First Lien Debt |
|
$ |
3,027,413 |
|
$ |
3,004,544 |
|
94.1% |
|
$ |
2,960,107 |
|
$ |
2,933,870 |
|
93.9% |
Second Lien Debt |
|
|
146,014 |
|
|
132,415 |
|
4.1 |
|
|
145,809 |
|
|
134,712 |
|
4.3 |
Other Investments |
|
|
53,349 |
|
|
56,602 |
|
1.8 |
|
|
52,685 |
|
|
54,868 |
|
1.8 |
Total |
|
$ |
3,226,776 |
|
$ |
3,193,561 |
|
100.0% |
|
$ |
3,158,601 |
|
$ |
3,123,450 |
|
100.0% |
Investment activity for the three months ended
Investment Activity: |
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New investment commitments, at par |
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Investment fundings |
|
|
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Number of new Investment commitments in portfolio companies |
12 |
7 |
||
Number of portfolio companies exited or fully repaid |
5 |
1 |
||
Total weighted average yield of investments in debt securities at amortized cost and fair value was 12.0% and 12.1%, respectively, which was unchanged from
CAPITAL AND LIQUIDITY
As of
RECENT DEVELOPMENTS
-
On
January 23, 2024 , MSDL priced its initial public offering, raising net proceeds of approximately$97 million ; -
The Company’s Board approved a share repurchase program, under which the Company may repurchase up to
$100.0 million of the Company’s common stock at prices below NAV, adjusted for dividends; -
The Company’s Board declared a regular first quarter dividend of
$0.50 per share and two$0.10 per share special dividends, timed to follow the two IPO lock-up release dates that occur in 2024; and -
The Company entered into a new advisory agreement with the Adviser that includes a waiver to reduce management and incentive fees through
January 24, 2025 , the first anniversary of the Company’s IPO, as well as institute an incentive fee lookback commencing with the quarter endedJune 30, 2024 .
CONFERENCE CALL INFORMATION
- Audio Webcast
- Conference Call
- Domestic: 877-400-0505
- International: 323-701-0225
- Passcode: 1562166
To avoid potential delays, please join at least 10 minutes prior to the start of the earnings call. An archived replay will also be available on the MSDL Investor Relations website.
About
Forward-Looking Statements
Statements included herein or on the webcast/conference call may constitute “forward-looking statements,” which relate to future events or MSDL’s future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results and conditions may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in MSDL’s filings with the
Consolidated Statements of Assets and Liabilities
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As of |
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Assets |
|
|
|
||||
Non-controlled/non-affiliated investments, at fair value (amortized cost of |
|
$ |
3,193,561 |
|
$ |
2,873,588 |
|
Cash |
|
|
69,705 |
|
|
81,215 |
|
Deferred financing costs |
|
|
14,317 |
|
|
7,624 |
|
Interest and dividend receivable from non-controlled/non-affiliated investments |
|
|
28,884 |
|
|
20,911 |
|
Subscription receivable |
|
|
41 |
|
|
2,556 |
|
Receivable for investments sold/repaid |
|
|
173 |
|
|
188 |
|
Prepaid expenses and other assets |
|
|
53 |
|
|
40 |
|
Total assets |
|
|
3,306,734 |
|
|
2,986,122 |
|
|
|
|
|
|
|||
Liabilities |
|
|
|
|
|||
Debt (net of unamortized debt issuance costs of |
|
|
1,496,032 |
|
|
1,523,475 |
|
Payable for investment purchased |
|
|
8 |
|
|
— |
|
Payable to affiliates |
|
|
2,870 |
|
|
2,086 |
|
Dividends payable |
|
|
49,968 |
|
|
33,058 |
|
Management fees payable |
|
|
2,012 |
|
|
1,783 |
|
Income based incentive fees payable |
|
|
11,766 |
|
|
8,118 |
|
Interest payable |
|
|
18,823 |
|
|
17,019 |
|
Accrued expenses and other liabilities |
|
|
4,104 |
|
|
3,278 |
|
Total liabilities |
|
$ |
1,585,583 |
|
$ |
1,588,817 |
|
|
|
|
|
|
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Commitments and Contingencies |
|
|
|
|
|||
|
|
|
|
|
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Net assets |
|
|
|
|
|||
Preferred stock, |
|
|
— |
|
|
— |
|
Common stock, par value |
|
|
83 |
|
|
71 |
|
Paid-in capital in excess of par value |
|
|
1,712,609 |
|
|
1,452,013 |
|
Total distributable earnings (loss) |
|
|
8,459 |
|
|
(54,779 |
) |
Total net assets |
|
$ |
1,721,151 |
|
$ |
1,397,305 |
|
Total liabilities and net assets |
|
$ |
3,306,734 |
|
$ |
2,986,122 |
|
Net asset value per share |
|
$ |
20.67 |
|
$ |
19.81 |
|
Consolidated Statements of Operations
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For the Year Ended |
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|
|
|
|
|
|
|
||||||
Investment Income: |
|
|
|
|
|
|
||||||
From non-controlled/non-affiliated investments: |
|
|
|
|
|
|
||||||
Interest income |
|
$ |
355,530 |
|
|
$ |
223,119 |
|
|
$ |
108,277 |
|
Payment-in-kind |
|
|
4,276 |
|
|
|
1,626 |
|
|
|
1,021 |
|
Dividend income |
|
|
2,124 |
|
|
|
1,488 |
|
|
|
409 |
|
Other income |
|
|
5,808 |
|
|
|
4,360 |
|
|
|
10,109 |
|
Total investment income |
|
|
367,738 |
|
|
|
230,593 |
|
|
|
119,816 |
|
Expenses: |
|
|
|
|
|
|
||||||
Interest and other financing expenses |
|
|
112,883 |
|
|
|
67,182 |
|
|
|
21,015 |
|
Management fees |
|
|
30,550 |
|
|
|
26,715 |
|
|
|
13,860 |
|
Income based incentive fees |
|
|
42,012 |
|
|
|
26,635 |
|
|
|
15,852 |
|
Capital gains incentive fees |
|
|
— |
|
|
|
(2,441 |
) |
|
|
1,809 |
|
Professional fees |
|
|
4,470 |
|
|
|
3,206 |
|
|
|
2,440 |
|
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
42 |
|
Directors’ fees |
|
|
345 |
|
|
|
362 |
|
|
|
336 |
|
Administrative service fees |
|
|
178 |
|
|
|
72 |
|
|
|
212 |
|
General and other expenses |
|
|
633 |
|
|
|
510 |
|
|
|
1,538 |
|
Total expenses |
|
|
191,071 |
|
|
|
122,241 |
|
|
|
57,104 |
|
Expense support |
|
|
— |
|
|
|
44 |
|
|
|
98 |
|
Management fees waiver |
|
|
(22,913 |
) |
|
|
(20,036 |
) |
|
|
(10,395 |
) |
Net expenses |
|
|
168,158 |
|
|
|
102,249 |
|
|
|
46,807 |
|
Net investment income (loss) before taxes |
|
|
199,580 |
|
|
|
128,344 |
|
|
|
73,009 |
|
Excise tax expense |
|
|
1,519 |
|
|
|
334 |
|
|
|
80 |
|
Net investment income/(loss) after taxes |
|
|
198,061 |
|
|
|
128,010 |
|
|
|
72,929 |
|
Net realized and unrealized gain (loss) on investment transactions: |
|
|
|
|
|
|
||||||
Net Realized gain (loss) on non-controlled/non-affiliated investments: |
|
|
118 |
|
|
|
537 |
|
|
|
1,895 |
|
Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated investments |
|
|
32,835 |
|
|
|
(80,005 |
) |
|
|
8,431 |
|
Net realized and unrealized gain (loss) |
|
|
32,953 |
|
|
|
(79,468 |
) |
|
|
10,326 |
|
Net increase (decrease) in net assets resulting from operations |
|
$ |
231,014 |
|
|
$ |
48,542 |
|
|
$ |
83,255 |
|
Per share information—basic and diluted |
|
|
|
|
|
|
||||||
Net investment income (loss) per share (basic and diluted) |
|
$ |
2.67 |
|
|
$ |
2.08 |
|
|
$ |
2.34 |
|
Earnings (loss) per share (basic and diluted) |
|
$ |
3.11 |
|
|
$ |
0.79 |
|
|
$ |
2.67 |
|
Weighted average shares outstanding |
|
|
74,239,743 |
|
|
|
61,676,363 |
|
|
|
31,159,302 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240229360545/en/
Investors
msdl@morganstanley.com
Media
212-762-0514
alyson.barnes@morganstanley.com
Source: