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 08, 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 share(1)                           ($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 
-----------------   ----------------------  -----------  ----------------------  ----------- 
                                            % of Total                           % of Total 
                                            Investments                          Investments 
                                              at Fair                              at Fair 
($ in thousands)       Cost     Fair Value     Value        Cost     Fair Value     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: 
                                        Three Months Ended  Three Months Ended 
Investment Activity:                      March 31, 2025     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.

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