NEW YORK--(BUSINESS WIRE)--November 06, 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 third quarter ended September 30, 2025.
QUARTERLY HIGHLIGHTS
-- Net investment income of $43.7 million, or $0.50 per share, as compared
to $43.7 million, or $0.50 per share, for the quarter ended June 30,
2025;
-- Net asset value of $20.41 per share, as compared to $20.59 as of June 30,
2025;
-- Debt-to-equity was 1.17x as of September 30, 2025, as compared to 1.15x
as of June 30, 2025;
-- New investment commitments of $183.0 million (net of any syndications),
fundings of $198.0 million and sales and repayments of $199.9 million,
resulting in net funded deployment of ($1.9) million;
-- The Company's Board of Directors (the "Board") declared a regular
dividend of $0.50 per share to shareholders of record as of September 30,
2025; and
-- The Company successfully priced and closed its inaugural CLO with
approximately $401mm of aggregate principal at a blended cost to the
Company of approximately S+ 1.70%.
SELECTED FINANCIAL HIGHLIGHTS
For the Quarter Ended
---------------------------------
($ in thousands, except per share
information) September 30, 2025 June 30, 2025
Net investment income per share $0.50 $0.50
------------------------------------------- ------------------ -------------
Net realized and unrealized gains (losses)
per share(1) ($0.18) ($0.09)
------------------------------------------- ------------------ -------------
Earnings per share $0.32 $0.41
------------------------------------------- ------------------ -------------
Regular dividend per share $0.50 $0.50
------------------------------------------- ------------------ -------------
(1) Amount shown may not correspond for the period as it includes the effect
of the timing of the distribution, shares repurchased and the issuance of
common stock.
As of
---------------------------------
($ in thousands, except per share
information) September 30, 2025 June 30, 2025
Investments, at fair value $3,775,797 $3,785,496
------------------------------------------- ------------------ -------------
Total debt outstanding, at principal $2,078,120 $2,054,188
------------------------------------------- ------------------ -------------
Net assets $1,771,611 $1,790,299
------------------------------------------- ------------------ -------------
Net asset value per share $20.41 $20.59
------------------------------------------- ------------------ -------------
Debt to equity 1.17x 1.15x
------------------------------------------- ------------------ -------------
Net debt to equity 1.13x 1.10x
------------------------------------------- ------------------ -------------
RESULTS OF OPERATIONS
Total investment income for the quarter ended September 30, 2025 was $99.7 million, compared to $99.5 million for the quarter ended June 30, 2025.
Total net expenses for the quarter ended September 30, 2025 were $56.0 million, compared to $55.9 million for the quarter ended June 30, 2025.
Net investment income for the quarter ended September 30, 2025 was $43.7 million, or $0.50 per share, compared to $43.7 million, or $0.50 per share, for the quarter ended June 30, 2025.
For the quarter ended September 30, 2025, net change in unrealized depreciation was $16.2 million.
PORTFOLIO AND INVESTMENT ACTIVITY
As of September 30, 2025, the Company's investment portfolio had a fair value of approximately $3.8 billion, comprised of 218 portfolio companies across 33 industries, with an average investment size of $17.3 million, or 0.5% of our total portfolio on a fair value basis. The composition of the Company's investments was the following:
September 30, 2025 June 30, 2025
----------------------------------- -----------------------------------
% of Total % of Total
Investments Investments
at Fair at Fair
($ in thousands) Cost Fair Value Value Cost Fair Value Value
---------- ---------- ----------- ---------- ---------- -----------
First Lien Debt $3,686,876 $3,638,914 96.3% $3,682,846 $3,650,847 96.4%
Second Lien Debt 82,757 72,101 1.9 82,435 71,721 1.9
Other Debt
Investments 11,566 9,954 0.3 11,280 9,773 0.3
Equity 56,523 54,828 1.5 54,646 53,155 1.4
---------- ---------- ----------- ---------- ---------- -----------
Total $3,837,722 $3,775,797 100.0% $3,831,207 $3,785,496 100.0%
========== ========== =========== ========== ========== ===========
Investment activity was as follows:
Three Months Ended Three Months Ended June
Investment Activity: September 30, 2025 30, 2025
------------------------ -------------------------
New investment
commitments, at par (net
of syndications) $183,049 $149,054
------------------------- ------------------------ -------------------------
Investment fundings $197,953 $204,003
------------------------- ------------------------ -------------------------
Number of new investment
commitments in portfolio
companies 9 9
------------------------- ------------------------ -------------------------
Number of portfolio
companies exited or
fully repaid 5 5
------------------------- ------------------------ -------------------------
Total weighted average yield of investments in debt securities at amortized cost and fair value was 9.7% and 9.9%, respectively, as of September 30, 2025, compared to 10.1% and 10.2%, respectively, as of June 30, 2025. Floating rate debt investments as a percentage of total portfolio on a fair value basis was 99.6% as of September 30, 2025, unchanged compared to June 30, 2025. As of September 30, 2025, certain investments in four portfolio companies were on non-accrual status, representing approximately 1.2% of total investments at amortized cost.
CAPITAL AND LIQUIDITY
As of September 30, 2025, the Company had total principal debt outstanding of $2,078.1 million, including $351.0 million outstanding in the Company's BNP funding facility, $293.1 million outstanding in the Company's Truist credit facility, $425.0 million outstanding in the Company's senior unsecured notes due February 2027, $350.0 million outstanding in the Company's senior unsecured notes due May 2029, $350.0 million outstanding in the Company's senior unsecured notes due May 2030 and $309.0 million outstanding in the Company's inaugural CLO that closed in September 2025. Additionally, on September 24, 2025, the Company executed an amendment to the BNP funding facility, which reduced the applicable margin on borrowings from 2.25% to 1.95%.
The combined weighted average interest rate on debt outstanding was 5.85% for the quarter ended September 30, 2025. As of September, 30, 2025, the Company had $1,396.1 million of availability under its credit facilities and $71.7 million in unrestricted cash and short term, liquid investments. Debt to equity was 1.17x and 1.15x as of September 30, 2025 and June 30, 2025, respectively.
SHARE REPURCHASES
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 September 30, 2025, the Company repurchased 151,417 shares at an average price of $18.78 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 quarter ended September 30, 2025 there were no shares issued through the ATM offering.
OTHER DEVELOPMENTS
On November 4, 2025, the Board declared a regular distribution of $0.50 per share, which is payable on or around January 23, 2026 to shareholders of record as of December 31, 2025.
CONFERENCE CALL INFORMATION
Morgan Stanley Direct Lending Fund will host a conference call on Friday, November 7, 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: 323-701-0225 -- International: 888-256-1007 -- Passcode: 1992384
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
-----------------------------------
September 30,
2025 December 31, 2024
--------------- ------------------
(Unaudited) (Audited)
--------------- ------------------
Assets
Non-controlled/non-affiliated
investments, at fair value
(amortized cost of $3,832,561
and $3,813,127) $ 3,770,818 $ 3,791,494
Non-controlled/affiliated
investments, at fair value
(amortized cost of $5,161 and
$0) 4,979 --
----------- --------------
Total investments, at fair
value (amortized cost of
$3,837,722 and $3,813,127) 3,775,797 3,791,494
Cash and cash equivalents
(restricted cash of $3,820 and
$2,000) 65,472 63,396
Investments in unaffiliated
money market fund (cost of
$10,051 and $8,976) 10,051 8,976
Deferred financing costs 17,892 16,498
Interest and dividend
receivable from
non-controlled/non-affiliated
investments 29,848 30,554
Interest and dividend
receivable from
non-controlled/affiliated
investments 46 --
Receivable for investments
sold/repaid 14,836 470
Prepaid expenses and other
assets 18,341 630
----------- --------------
Total assets 3,932,283 3,912,018
----------- --------------
Liabilities
Debt (net of unamortized debt
issuance costs of $11,180 and
$6,527) 2,072,400 1,973,479
Payable for investment
purchased -- 192
Payable to affiliates (Note 3) 176 29
Dividends payable 43,499 53,229
Management fees payable 9,628 7,042
Income based incentive fees
payable 9,281 8,956
Interest payable 22,157 21,205
Accrued expenses and other
liabilities 3,531 5,730
----------- --------------
Total liabilities 2,160,672 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; 86,811,212 and
88,511,089 shares issued and
outstanding) 87 89
Paid-in capital in excess of
par value 1,779,430 1,812,443
Total distributable earnings
(loss) (7,906) 29,624
----------- --------------
Total net assets $ 1,771,611 $ 1,842,156
----------- --------------
Total liabilities and net assets $ 3,932,283 $ 3,912,018
=========== ==============
Net asset value per share $ 20.41 $ 20.81
Consolidated Statements of Operations (unaudited)
(In thousands, except share amounts)
For the Three Months Ended For the Nine Months Ended
----------------------------- ----------------------------
September September 30, September September 30,
30, 2025 2024 30, 2025 2024
------------ --------------- ------------ --------------
Investment Income:
From
non-controlled/non-affiliated
investments:
Interest income $ 93,477 $ 105,129 $ 282,171 $ 298,832
Payment-in-kind 3,969 2,150 11,973 7,644
Dividend income 685 670 1,929 1,881
Other income 1,467 1,803 4,337 4,684
From non-controlled/affiliated
investments:
Interest income 36 -- 106 --
Payment-in-kind 88 -- 174 --
---------- ---------- ---------- ----------
Total investment income 99,722 109,752 300,690 313,041
---------- ---------- ---------- ----------
Expenses:
Interest and other
financing expenses 33,903 33,153 102,788 89,715
Management fees 9,628 9,100 28,870 25,969
Income based incentive
fees 9,281 10,128 28,404 33,018
Professional fees 2,530 1,708 5,836 4,612
Directors' fees 129 130 388 404
Administrative service
fees 81 138 228 180
General and other
expenses 38 120 348 279
---------- ---------- ---------- ----------
Total expenses 55,590 54,477 166,862 154,177
---------- ---------- ---------- ----------
Management fees waiver
(Note 3) -- -- (2,275) (641) (7,532)
Incentive fees waiver
(Note 3) -- (1,680) (375) (4,542)
---------- ---------- ---------- ----------
Net expenses 55,590 50,522 165,846 142,103
---------- ---------- ---------- ----------
Net investment income (loss)
before taxes 44,132 59,230 134,844 170,938
---------- ---------- ---------- ----------
Excise tax expense 402 501 1,229 1,437
---------- ---------- ---------- ----------
Net investment income (loss)
after taxes 43,730 58,729 133,615 169,501
========== ========== ========== ==========
Net realized and unrealized
gain (loss):
Realized gain (loss):
Net realized gain (loss) on
non-controlled/non-affiliated
investments 22 (10,965) 609 (16,482)
Foreign currency and other
transactions 4 -- 57 --
---------- ---------- ---------- ----------
Net realized gain (loss) 26 (10,965) 666 (16,482)
Net change in unrealized
appreciation (depreciation):
Net change in unrealized
appreciation (depreciation) on
non-controlled/non-affiliated
investments (15,909) 5,442 (40,808) 10,916
Net change in unrealized
appreciation (depreciation) on
non-controlled/affiliated
investments (222) -- (182) --
Translation of assets and
liabilities in foreign
currencies (24) -- 76 --
---------- ---------- ---------- ----------
Net unrealized appreciation
(depreciation) (16,155) 5,442 (40,914) 10,916
---------- ---------- ---------- ----------
Net realized and unrealized
gain (loss) (16,129) (5,523 ) (40,248) (5,566)
---------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from
operations $ 27,601 $ 53,206 $ 93,367 $ 163,935
========== ========== ========== ==========
Net investment income (loss)
per share (basic and diluted) $ 0.50 $ 0.66 $ 1.53 $ 1.91
Earnings per share (basic and
diluted) $ 0.32 $ 0.60 $ 1.07 $ 1.85
Weighted average shares
outstanding 86,844,648 89,264,686 87,476,954 88,633,994
View source version on businesswire.com: https://www.businesswire.com/news/home/20251105677291/en/
CONTACT: Investors
Sanna Johnson
msdl@morganstanley.com
Media
Alyson Barnes
212-762-0514
alyson.barnes@morganstanley.com
(END) Dow Jones Newswires
November 06, 2025 16:15 ET (21:15 GMT)
Comments