NEW YORK, February 27, 2025--(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 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.

Story Continues

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

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