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Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund Announces March 31, 2025 Financial Results and Declares Second Quarter 2025 Regular Dividend of $0.50 per Share

NEW YORK--(BUSINESS WIRE)--May 8, 2025--

Morgan Stanley Direct Lending Fund (NYSE: MSDL) (“MSDL” or the “Company”), a business development company externally managed by MS Capital Partners Adviser Inc. (the “Adviser”), today announced its financial results for the first quarter ended March 31, 2025.

QUARTERLY HIGHLIGHTS

  • Net investment income of $46.2 million, or $0.52 per share, as compared to $50.7 million, or $0.57 per share, for the quarter ended December 31, 2024;
  • Net asset value of $20.65 per share, as compared to $20.81 as of December 31, 2024;
  • Debt-to-equity was 1.11x as of March 31, 2025, as compared to 1.08x as of December 31, 2024;
  • New investment commitments of $233.4 million, fundings of $205.6 million and sales and repayments of $201.8 million, resulting in net funded deployment of $3.8 million;
  • The Company’s Board of Directors (the “Board”) declared a regular dividend of $0.50 per share to shareholders of record as of March 31, 2025; and
  • The Company established an at-the-market offering (“ATM”) through which the Company may sell shares of its common stock, having an aggregate offering price of up to $300.0 million.

SELECTED FINANCIAL HIGHLIGHTS

For the Quarter Ended

  ($ in thousands, except per share information)

March 31, 2025

December 31, 2024

Net investment income per share

$0.52

$0.57

Net realized and unrealized gains (losses) per share1

   ($0.18)

  $0.01

Earnings per share

$0.34

$0.58

Regular dividend per share

$0.50

$0.50

Special dividend per share

-

$0.10

1 Amount shown may not correspond for the period as it includes the effect of the timing of the distribution, shares repurchased and the issuance of common stock. 

 

As of

($ in thousands, except per share information)

March 31, 2025

December 31, 2024

Investments, at fair value

$3,788,178

$3,791,494

Total debt outstanding, at principal

$2,013,588

$1,983,401

Net assets

$1,817,807

$1,842,156

Net asset value per share

$20.65

$20.81

Debt to equity

1.11x

1.08x

Net debt to equity

1.07x

1.04x

 

RESULTS OF OPERATIONS
Total investment income for the quarter ended March 31, 2025 was $101.5 million, compared to $103.0 million for the quarter ended December 31, 2024. The decrease was primarily driven by lower base rates, partially offset by higher repayment related income as compared to the prior period.

Total net expenses for the quarter ended March 31, 2025 were $55.2 million, compared to $52.3 million for the quarter ended December 31, 2024. The increase in net expenses quarter over quarter was primarily attributable to higher net management and income based incentive fees incurred following the expiration of the Adviser’s waiver of a portion of the base management and incentive fees in connection with the Company’s initial public offering.

Net investment income for the quarter ended March 31, 2025 was $46.2 million, or $0.52 per share, compared to $50.7 million, or $0.57 per share, for the quarter ended December 31, 2024.

For the quarter ended March 31, 2025, net change in unrealized depreciation on investments was $17.1 million, partially offset by net realized gains of $0.5 million.

PORTFOLIO AND INVESTMENT ACTIVITY
As of March 31, 2025, the Company’s investment portfolio had a fair value of approximately $3.8 billion, comprised of 210 portfolio companies across 34 industries, with an average investment size of $18.0 million, or 0.5% of our total portfolio on a fair value basis. The composition of the Company’s investments was the following:

 

 

March 31, 2025

December 31, 2024

 

($ in thousands)

 

Cost

 

Fair Value

 

% of Total
Investments at
Fair Value

 

Cost

 

Fair Value

 

% of Total
Investments at
Fair Value

First Lien Debt

 

$3,679,424

 

$3,652,320

 

96.3%

 

$3,669,886

 

$3,654,538

 

96.5%

Second Lien Debt

 

82,134

 

71,190

 

1.9

 

78,803

 

69,367

 

1.8

Other Debt Investments

 

11,008

 

9,603

 

0.3

 

9,755

 

9,198

 

0.2

Equity

 

54,165

 

55,065

 

1.5

 

54,683

 

58,391

 

1.5

Total

 

$3,826,731

 

$3,788,178

 

100.0%

 

$3,813,127

 

$3,791,494

 

100.0%

Investment activity was as follows:

Investment Activity:

Three Months Ended
March 31, 2025

Three Months Ended
December 31, 2024

New investment commitments, at par

$233,368

$188,269

Investment fundings

$205,647

$187,324

Number of new investment commitments in portfolio companies

9

10

Number of portfolio companies exited or fully repaid

7

2

Total weighted average yield of investments in debt securities at amortized cost and fair value was 10.2% and 10.3%, respectively, as of March 31, 2025, compared to 10.4% and 10.5%, respectively, as of December 31, 2024. Floating rate debt investments as a percentage of total portfolio on a fair value basis was 99.6% as of March 31, 2025, unchanged compared to December 31, 2024. As of March 31, 2025, certain investments in two portfolio companies were on non-accrual status, representing approximately 0.2% of total investments at amortized cost.

CAPITAL AND LIQUIDITY
As of March 31, 2025, the Company had total principal debt outstanding of $2,013.6 million, including $316.0 million outstanding in the Company’s BNP funding facility, $647.6 million outstanding in the Company’s Truist credit facility, $275.0 million outstanding in the Company’s senior unsecured notes due September 2025, $425.0 million outstanding in the Company’s senior unsecured notes due February 2027 and $350.0 million outstanding in the Company’s senior unsecured notes due May 2029. On February 25, 2025, the Company executed an amendment to the Truist Credit Facility, extending the maturity to February 2030, increasing the total commitment to $1.45 billion and lowering the spread to 1.775%. The combined weighted average interest rate on debt outstanding was 6.11% for the quarter ended March 31, 2025. As of March 31, 2025, the Company had $1,084.1 million of availability under its credit facilities and $65.6 million in unrestricted cash. Debt to equity was 1.11x and 1.08x as of March 31, 2025 and December 31, 2024, respectively.

SHARE REPURCHASES
In January 2024, the Company authorized a share repurchase program to acquire up to $100.0 million in the aggregate of the Company’s common stock at prices below net asset value. On February 27, 2025, the Board authorized an amended and restated share repurchase program, which has a maximum size of $100.0 million, exclusive of prior repurchases. For the three months ended March 31, 2025, the Company repurchased 491,332 shares at an average price of $20.38 per share.

ATM OFFERING
On March 28, 2025, the Company entered into equity distribution agreements pursuant to which the Company may sell shares of the Company’s common stock having an aggregate offering price of up to $300.0 million.

For the three months ended March 31, 2025 there were no shares issued through the ATM offering.

OTHER DEVELOPMENTS

  • On May 8, 2025, the Board declared a regular distribution of $0.50 per share, which is payable on July 25, 2025 to shareholders of record as of June 30, 2025.

CONFERENCE CALL INFORMATION
Morgan Stanley Direct Lending Fund will host a conference call on Friday, May 9, 2025 at 10:00 am ET to review its financial results and conduct a question-and-answer session. All interested parties are invited to participate in the live earnings conference call by using the following dial-in numbers or audio webcast link available on the MSDL Investor Relations website:

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 Morgan Stanley Direct Lending Fund
 Morgan Stanley Direct Lending Fund (NYSE: MSDL) is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. MSDL has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. MSDL is externally managed by MS Capital Partners Adviser Inc., an indirect, wholly owned subsidiary of Morgan Stanley. MSDL is not a subsidiary of or consolidated with Morgan Stanley. For more information about Morgan Stanley Direct Lending Fund, please visit www.msdl.com.

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 U.S. Securities and Exchange Commission. MSDL undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call.

Consolidated Statements of Assets and Liabilities
(In thousands, except share and per share amounts)

 

 

As of

 

 

March 31, 2025

 

December 31, 2024

 

 

(Unaudited)

 

(Audited)

Assets

 

 

 

 

Non-controlled/non-affiliated investments, at fair value (amortized cost of $3,821,720 and $3,813,127)

 

$

3,783,126

 

$

3,791,494

Non-controlled/affiliated investments, at fair value (amortized cost of $5,011 and $0)

 

 

5,052

 

 

—

Total investments, at fair value (amortized cost of $3,826,731 and $3,813,127)

 

 

3,788,178

 

 

3,791,494

Cash and cash equivalents (restricted cash of $3,820 and $2,000)

 

 

69,400

 

 

72,372

Deferred financing costs

 

 

19,847

 

 

16,498

Interest and dividend receivable from non-controlled/non-affiliated investments

 

 

26,894

 

 

30,554

Interest and dividend receivable from non-controlled/affiliated investments

 

 

40

 

 

—

Receivable for investments sold/repaid

 

 

364

 

 

470

Prepaid expenses and other assets

 

 

7,448

 

 

630

Total assets

 

 

3,912,171

 

 

3,912,018

 

 

 

 

 

Liabilities

 

 

 

 

Debt (net of unamortized debt issuance costs of $5,634 and $6,527)

 

 

2,008,946

 

 

1,973,479

Payable for investment purchased

 

 

2,096

 

 

192

Payable to affiliates (Note 3)

 

 

11

 

 

29

Dividends payable

 

 

44,103

 

 

53,229

Management fees payable

 

 

8,977

 

 

7,042

Income based incentive fees payable

 

 

9,468

 

 

8,956

Payable for Stock repurchased (Note 8)

 

 

392

 

 

—

Interest payable

 

 

16,366

 

 

21,205

Accrued expenses and other liabilities

 

 

4,005

 

 

5,730

Total liabilities

 

 

2,094,364

 

 

2,069,862

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

Net assets

 

 

 

 

Preferred stock, $0.001 par value (1,000,000 shares authorized; no shares issued and outstanding)

 

 

—

 

 

—

Common stock, par value $0.001 (500,000,000 shares authorized; 88,019,757 and 88,511,089 shares issued and outstanding)

 

 

88

 

 

89

Paid-in capital in excess of par value

 

 

1,802,435

 

 

1,812,443

Total distributable earnings (loss)

 

 

15,284

 

 

29,624

Total net assets

 

$

1,817,807

 

$

1,842,156

Total liabilities and net assets

 

$

3,912,171

 

$

3,912,018

Net asset value per share

 

$

20.65

 

$

20.81

Consolidated Statements of Operations (unaudited)

(In thousands, except share amounts)

 

 

For the Three Months Ended

 

 

March 31, 2025

 

March 31, 2024

Investment Income:

 

 

 

 

From non-controlled/non-affiliated investments:

 

 

 

 

Interest income

 

$

94,941

 

 

$

94,631

 

Payment-in-kind

 

 

4,188

 

 

 

2,644

 

Dividend income

 

 

594

 

 

 

565

 

Other income

 

 

1,695

 

 

 

1,261

 

From non-controlled/affiliated investments:

 

 

 

 

Interest income

 

 

26

 

 

 

—

 

Payment-in-kind

 

 

14

 

 

 

—

 

Total investment income

 

 

101,458

 

 

 

99,101

 

 

 

 

 

 

Expenses:

 

 

 

 

Interest and other financing expenses

 

 

34,179

 

 

 

27,260

 

Management fees

 

 

9,618

 

 

 

8,230

 

Income based incentive fees

 

 

9,843

 

 

 

11,336

 

Professional fees

 

 

1,608

 

 

 

1,217

 

Directors’ fees

 

 

129

 

 

 

146

 

Administrative service fees

 

 

60

 

 

 

25

 

General and other expenses

 

 

182

 

 

 

108

 

Total expenses

 

 

55,619

 

 

 

48,322

 

Management fees waiver (Note 3)

 

 

(641

)

 

 

(3,098

)

Incentive fees waiver (Note 3)

 

 

(375

)

 

 

(1,210

)

Net expenses

 

 

54,603

 

 

 

44,014

 

Net investment income (loss) before taxes

 

 

46,855

 

 

 

55,087

 

Excise tax expense

 

 

627

 

 

 

436

 

Net investment income (loss) after taxes

 

 

46,228

 

 

 

54,651

 

 

 

 

 

 

Net realized and unrealized gain (loss):

 

 

 

 

Realized gain (loss):

 

 

 

 

Net realized gain (loss) on non-controlled/non-affiliated investments

 

 

562

 

 

 

(5,625

)

Foreign currency and other transactions

 

 

(13

)

 

 

—

 

Net realized gain (loss):

 

 

549

 

 

 

(5,625

)

Net change in unrealized appreciation (depreciation):

 

 

 

 

Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated investments

 

 

(17,148

)

 

 

2,658

 

Net change in unrealized appreciation (depreciation) on non-controlled/affiliated investments

 

 

42

 

 

 

—

 

Translation of assets and liabilities in foreign currencies

 

 

(1

)

 

 

—

 

Net unrealized appreciation (depreciation)

 

 

(17,107

)

 

 

2,658

 

Net realized and unrealized gain (loss)

 

 

(16,558

)

 

 

(2,967

)

Net increase (decrease) in net assets resulting from operations

 

$

29,670

 

 

$

51,684

 

 

 

 

 

 

Net investment income (loss) per share (basic and diluted)

 

$

0.52

 

 

$

0.63

 

Earnings per share (basic and diluted)

 

$

0.34

 

 

$

0.59

 

Weighted average shares outstanding:

 

 

88,413,652

 

 

 

87,358,527

 

 

Investors
Sanna Johnson
msdl@morganstanley.com

Media
Alyson Barnes
212-762-0514
alyson.barnes@morganstanley.com

Source: Morgan Stanley Direct Lending Fund