Morgan Stanley Direct Lending Fund Announces September 30, 2025 Financial Results and Declares Fourth Quarter 2025 Regular Dividend of $0.50 per Share
NEW YORK--( BUSINESS WIRE)--Morgan Stanley Direct Lending Fund (NYSE: MSDL) (“MSDL” or the “Company”), a business development company externally managed by MS Capital Partners Adviser Inc. (the “Adviser”), today announced its financial results for the third quarter ended September 30, 2025.
QUARTERLY HIGHLIGHTS
SELECTED FINANCIAL HIGHLIGHTS
For the Quarter Ended
($ 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 $17.3 million, or 0.5% of our total portfolio on a fair value basis. The composition of the Company’s investments was the following:
September 30, 2025
June 30, 2025
($ in thousands)
Cost
Fair Value
% of Total Investments at Fair Value
Cost
Fair Value
% of Total Investments at Fair 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:
Investment Activity:
Three Months Ended September 30, 2025
Three Months Ended June 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:
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 30, 2025
September 30, 2024
September 30, 2025
September 30, 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