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Morgan Stanley

Morgan Stanley Direct Lending Fund Reports Strong Second Quarter Results

Strategic Insights

— 2 min read

Morgan Stanley Direct Lending Fund, a business development company externally managed by MS Capital Partners Adviser Inc., has announced its financial results for the second quarter ended June 30, 2024. The Company generated strong operating results, with net investment income of $56.1 million, or $0.63 per share, and a net asset value of $20.83 per share. This performance was supported by continued credit stability in the portfolio of senior, sponsor-backed middle market loans.

Key Takeaways:

  • Net investment income for the second quarter ended June 30, 2024 was $56.1 million, or $0.63 per share, compared to $54.7 million, or $0.63 per share, for the quarter ended March 31, 2024.
  • The Company's investment portfolio had a fair value of approximately $3.5 billion as of June 30, 2024, comprised of 192 portfolio companies across 34 industries.
  • The composition of the Company's investments was as follows: First Lien Debt 95.3%, Second Lien Debt 2.9%, Other Debt Investments 0.2%, and Equity 1.6% of total investments at fair value.
  • Investment activity for the three months ended June 30, 2024 and March 31, 2024, was as follows: New investment commitments, at par $673,902 and $232,120, Investment fundings $499,684 and $168,357, Number of new Investment commitments in portfolio companies 22 and 9, and Number of portfolio companies exited or fully repaid 8 and 3.
  • Total weighted average yield of investments in debt securities at amortized cost and fair value was 11.6% and 11.7%, respectively, as of June 30, 2024, compared to 11.9% and 12.0%, respectively, as of March 31, 2024.
  • As of June 30, 2024, portions of two portfolio companies were on non-accrual status, representing approximately 0.3% of total investments at amortized cost.
  • The Company had total principal debt outstanding of $1,675.5 million as of June 30, 2024, including $194.0 million outstanding in the Company's BNP funding facility.
  • The combined weighted average interest rate on debt outstanding was 6.57% for the quarter ended June 30, 2024.
  • As of June 30, 2024, the Company had $1,270.4 million of availability under its credit facilities and $93.0 million in unrestricted cash.

Statistics:

  • Net investment income for the second quarter ended June 30, 2024 was $56.1 million.
  • Net asset value per share as of June 30, 2024 was $20.83.
  • Total principal debt outstanding as of June 30, 2024 was $1,675.5 million.
  • Combined weighted average interest rate on debt outstanding for the quarter ended June 30, 2024 was 6.57%.
  • Availability under credit facilities as of June 30, 2024 was $1,270.4 million.
  • Unrestricted cash as of June 30, 2024 was $93.0 million.
  • Total investments at fair value as of June 30, 2024 was $3,514,286.
  • Cost and fair value of investments as of June 30, 2024 was:

+ First Lien Debt: $3,356,586 and $3,345,743.

+ Second Lien Debt: $122,416 and $103,144.

+ Other Debt Investments: $9,289 and $8,467.

+ Equity: $53,735 and $56,932.

Sources:

  • Morgan Stanley Direct Lending Fund News Release, August 6, 2024
  • Morgan Stanley Direct Lending Fund Financial Statements, June 30, 2024

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