MSDL Morgan Stanley Direct Lending Fund

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 

 

FORM 8-K

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 27, 2025 

 

 

Morgan Stanley Direct Lending Fund

(Exact name of registrant as specified in its charter)

 

 

Delaware	814-01332	84-2009506
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

 

1585 Broadway New York, NY	10036
(Address of principal executive offices)	(Zip Code)

 

1 (212) 761-4000

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former Name or Former Address, if changed since last report) 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MSDL	The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On February 27, 2025, Morgan Stanley Direct Lending Fund (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2024. The text of the press release is included as Exhibit 99.1 to this Form 8-K.

 

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being “furnished” and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 7.01. Regulation FD Disclosure.

 

On February 27, 2025, the Board of Directors of the Company declared a regular distribution to stockholders in the amount of $0.50 per share. The distribution will be payable on or around April 25, 2025 to stockholders of record as of March 31, 2025.

 

The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being “furnished” and shall not be deemed “filed” by the Company for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits:

 

Exhibit Number		Description
99.1		Press Release of Morgan Stanley Direct Lending Fund, dated February 27, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: February 27, 2025	MORGAN STANLEY DIRECT LENDING FUND
	By:	/s/ David Pessah
		David Pessah
		Chief Financial Officer

 

 

Exhibit 99.1

 

 

Morgan Stanley Direct Lending Fund Announces December 31, 2024 Financial Results and Declares First Quarter 2025 Regular Dividend of $0.50 per Share

 

NEW YORK, NY, February 27, 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 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.

 

 

 

Contacts

 

Investors Sanna Johnson msdl@morganstanley.com

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

 

 

 

 

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

 

 

v3.25.0.1

Cover	Feb. 27, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 27, 2025
Entity File Number	814-01332
Entity Registrant Name	Morgan Stanley Direct Lending Fund
Entity Central Index Key	0001782524
Entity Tax Identification Number	84-2009506
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1585 Broadway
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10036
City Area Code	212
Local Phone Number	761-4000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	MSDL
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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