MSDL Morgan Stanley Direct Lending Fund

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 fourth quarter and fiscal year ended December 31, 2024.

QUARTERLY HIGHLIGHTS

• Net investment income of $50.7 million, or $0.57 per share, as compared to $58.7 million, or $0.66 per share, for the quarter ended September 30, 2024;
• Net asset value of $20.81 per share, as compared to $20.83 as of September 30, 2024;
• Debt-to-equity was 1.08x as of December 31, 2024, as compared to 0.99x as of September 30, 2024;
• New investment commitments of $188.3 million, fundings of $187.3 million and sales and repayments of $43.6 million, resulting in net funded deployment of $143.7 million; and
• The Company’s Board of Directors (the “Board”) declared a regular dividend of $0.50 per share to shareholders of record as of December 31, 2024 as well as a special dividend, which was previously declared by the Board on January 11, 2024, of $0.10 per share to stockholders of record as of November 4, 2024.

SELECTED FINANCIAL HIGHLIGHTS

For the Quarter Ended

($ in thousands, except per share information)

December 31, 2024

 

September 30, 2024

Net investment income per share

$0.57

 

$0.66

Net realized and unrealized gains (losses) per share1

$0.01

 

($0.06)

Earnings per share

$0.58

 

$0.60

Regular dividend per share

$0.50

 

$0.50

Special dividend per share

$0.10

 

$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)

December 31, 2024

 

September 30, 2024

Investments, at fair value

$3,791,494

 

$3,640,324

Total debt outstanding, at principal

$1,983,401

 

$1,841,987

Net assets

$1,842,156

 

$1,853,722

Net asset value per share

$20.81

 

$20.83

Debt to equity

1.08x

 

0.99x

Net debt to equity

1.04x

 

0.94x

RESULTS OF OPERATIONS

Total investment income for the quarter ended December 31, 2024 was $103.0 million, compared to $109.8 million for the quarter ended September 30, 2024. The decrease was primarily driven by lower base rates and repayment related income as compared to the prior period.

Total net expenses for the quarter ended December 31, 2024 were $52.3 million, compared to $51.0 million for the quarter ended September 30, 2024. The increase in net expenses quarter over quarter was primarily attributable to higher net management and income based incentive fees incurred.

Net investment income for the quarter ended December 31, 2024 was $50.7 million, or $0.57 per share, compared to $58.7 million, or $0.66 per share, for the quarter ended September 30, 2024.

For the quarter ended December 31, 2024, net change in unrealized appreciation on investments was $0.9 million.

PORTFOLIO AND INVESTMENT ACTIVITY

As of December 31, 2024, the Company’s investment portfolio had a fair value of approximately $3.8 billion, comprised of 208 portfolio companies across 33 industries, with an average investment size of $18.2 million, or 0.5% of our total portfolio on a fair value basis. The composition of the Company’s investments was the following:

 

December 31, 2024

September 30, 2024

($ in thousands)

 

Cost

 

Fair Value

 

% of Total Investments at Fair Value

 

Cost

 

Fair Value

 

% of Total Investments at Fair Value

First Lien Debt

 

$3,669,886

 

$3,654,538

 

96.5%

 

$3,506,164

 

$3,492,302

 

96.0%

Second Lien Debt

 

78,803

 

69,367

 

1.8

 

93,422

 

84,074

 

2.3

Other Debt Investments

 

9,755

 

9,198

 

0.2

 

9,525

 

8,809

 

0.2

Equity

 

54,683

 

58,391

 

1.5

 

53,507

 

55,139

 

1.5

Total

 

$3,813,127

 

$3,791,494

 

100.0%

 

$3,662,618

 

$3,640,324

 

100.0%

Investment activity for the year ended December 31, 2024 and for the three months ended December 31, 2024 and September 30, 2024, was as follows:

Investment Activity:

 

Year Ended

December 31,

2024

Three Months

Ended

December 31,

2024

Three Months

Ended

September 30,

2024

New investment commitments, at par

$1,549,656

$188,269

$455,365

Investment fundings

$1,232,384

$187,324

$377,019

Number of new investment commitments in portfolio companies

60

10

19

Number of portfolio companies exited or fully repaid

24

2

11

Total weighted average yield of investments in debt securities at amortized cost and fair value was 10.4% and 10.5%, respectively, as of December 31, 2024, compared to 11.0% and 11.0%, respectively, as of September 30, 2024. Floating rate debt investments as a percentage of total portfolio on a fair value basis was 99.6% as of December 31, 2024, unchanged compared to September 30, 2024. As of December 31, 2024, 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 December 31, 2024, the Company had total principal debt outstanding of $1,983.4 million, including $316.0 million outstanding in the Company’s BNP funding facility, $617.4 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. The combined weighted average interest rate on debt outstanding was 6.19% for the quarter ended December 31, 2024. As of December 31, 2024, the Company had $964.8 million of availability under its credit facilities and $70.4 million in unrestricted cash. Debt to equity was 1.08x and 0.99x as of December 31, 2024 and September 30, 2024, respectively.

SHARE REPURCHASES

On January 25, 2024, the Company entered into a share repurchase plan to acquire up to $100 million in the aggregate of the Company’s Common Stock at prices below NAV. For the three months ended December 31, 2024, the Company purchased 494,943 shares at an average price of $20.20 per share.

OTHER DEVELOPMENTS

• On February 27, 2025, the Board declared a regular distribution of $0.50 per share, which is payable on April 25, 2025 to shareholders of record as of March 31, 2025.
• On February 27, 2025, the Board authorized an amended and restated share repurchase plan, pursuant to a 10b5-1 program, which has a maximum size of $100 million and a duration of an additional twelve months; the original plan would have expired on March 25, 2025.
• 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%.

CONFERENCE CALL INFORMATION

Morgan Stanley Direct Lending Fund will host a conference call on Friday, February 28, 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:

• Audio Webcast
• Conference Call
• Domestic: 323-994-2093
• International: 888-254-3590
• Passcode: 4836455

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

 

 

December 31, 2024

 

December 31, 2023

 

 

(Audited)

 

(Audited)

Assets

 

 

 

 

Non-controlled/non-affiliated investments, at fair value (amortized cost of $3,813,127 and $3,226,776)

 

$

3,791,494

 

$

3,193,561

Cash and cash equivalents (restricted cash of $2,000 and $0)

 

 

72,372

 

 

69,705

Deferred financing costs

 

 

16,498

 

 

14,317

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

 

 

30,554

 

 

28,884

Subscription receivable

 

 

—

 

 

41

Receivable for investments sold

 

 

470

 

 

173

Prepaid expenses and other assets

 

 

630

 

 

53

Total assets

 

 

3,912,018

 

 

3,306,734

 

 

 

 

 

Liabilities

 

 

 

 

Debt (net of unamortized debt issuance costs of $6,527 and $5,564)

 

 

1,973,479

 

 

1,496,032

Payable for investment purchased

 

 

192

 

 

8

Payable to affiliates (Note 3)

 

 

29

 

 

2,870

Dividends payable

 

 

53,229

 

 

49,968

Management fees payable

 

 

7,042

 

 

2,012

Income based incentive fees payable

 

 

8,956

 

 

11,766

Interest payable

 

 

21,205

 

 

18,823

Accrued expenses and other liabilities

 

 

5,730

 

 

4,104

Total liabilities

 

 

2,069,862

 

 

1,585,583

 

 

 

 

 

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 (100,000,000 shares authorized; 88,511,089 and 83,278,831 shares issued and outstanding)

 

 

89

 

 

83

Paid-in capital in excess of par value

 

 

1,812,443

 

 

1,712,609

Total distributable earnings (loss)

 

 

29,624

 

 

8,459

Total net assets

 

$

1,842,156

 

$

1,721,151

Total liabilities and net assets

 

$

3,912,018

 

$

3,306,734

Net asset value per share

 

$

20.81

 

$

20.67

Consolidated Statements of Operations (audited)

(In thousands, except share amounts)

 

For the Year Ended

 

 

December 31, 2024

 

December 31, 2023

 

December 31, 2022

Investment Income:

 

 

 

 

 

 

From non-controlled/non-affiliated investments:

 

 

 

 

 

 

Interest income

 

$

396,421

 

$

355,530

 

$

223,119

Payment-in-kind

 

 

10,709

 

 

4,276

 

 

1,626

Dividend income

 

 

2,591

 

 

2,124

 

 

1,488

Other income

 

 

6,354

 

 

5,808

 

 

4,360

Total investment income

 

 

416,075

 

 

367,738

 

 

230,593

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

Interest and other financing expenses

 

 

122,928

 

 

112,883

 

 

67,182

Management fees

 

 

35,415

 

 

30,550

 

 

26,715

Income based incentive fees

 

 

43,467

 

 

42,012

 

 

26,635

Capital gains incentive fees

 

 

-

 

 

-

 

 

(2,441)

Professional fees

 

 

6,718

 

 

4,470

 

 

3,206

Directors’ fees

 

 

533

 

 

345

 

 

362

Administrative service fees

 

 

216

 

 

178

 

 

72

General and other expenses

 

 

97

 

 

633

 

 

510

Total expenses

 

 

209,374

 

 

191,071

 

 

122,241

Expense support (Note 3)

 

 

-

 

 

-

 

 

44

Management fees waiver (Note 3)

 

 

(9,936)

 

 

(22,913)

 

 

(20,036)

Incentive fees waiver (Note 3)

 

 

(6,035)

 

 

-

 

 

-

Net expenses

 

 

193,403

 

 

168,158

 

 

102,249

Net investment income (loss) before taxes

 

 

222,672

 

 

199,580

 

 

128,344

Excise tax expense

 

 

2,437

 

 

1,519

 

 

334

Net investment income (loss) after taxes

 

 

220,235

 

 

198,061

 

 

128,010

 

 

 

 

 

 

 

Net realized and unrealized gain (loss):

 

 

 

 

 

 

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

 

 

(16,480)

 

 

118

 

 

537

Foreign currency and other transactions

 

 

13

 

 

-

 

 

-

Net realized gain (loss)

 

 

(16,467)

 

 

118

 

 

537

Net change in unrealized appreciation (depreciation):

 

 

 

 

 

 

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

 

 

11,904

 

 

32,835

 

 

(80,005)

Translation of assets and liabilities in foreign currencies

 

 

(108)

 

 

-

 

 

-

Net unrealized appreciation (depreciation)

 

 

11,796

 

 

32,835

 

 

(80,005)

Net realized and unrealized gain (loss)

 

 

(4,671)

 

 

32,953

 

 

(79,468)

Net increase (decrease) in net assets resulting from operations

 

$

215,564

 

$

231,014

 

$

48,542

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

 

$

2.48

 

$

2.67

 

$

2.08

Earnings per share (basic and diluted)

 

$

2.43

 

$

3.11

 

$

0.79

Weighted average shares outstanding

 

 

88,649,149

 

 

74,239,743

 

 

61,676,363

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227262838/en/

Investors Sanna Johnson msdl@morganstanley.com

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