Morgan Stanley Direct Lending Fund Establishes Pricing Terms for $401.2 Million CLO Transaction

Morgan Stanley Direct Lending Fund, a direct subsidiary of Morgan Stanley Direct Lending Fund, has established pricing terms for a collateralized loan obligation (CLO) transaction, marking a key step in the company's strategic plan to expand its financing capabilities. The CLO transaction, which is expected to close on or about September 17, 2025, will involve the issuance of approximately $401.2 million in aggregate principal amount of notes, consisting of senior secured floating rate notes and subordinated notes. The notes will be collateralized by assets held by the Issuer, a direct subsidiary of Morgan Stanley Direct Lending Fund.

Key Takeaways:

The CLO transaction will result in the issuance of approximately $401.2 million in aggregate principal amount of notes, consisting of senior secured floating rate notes and subordinated notes.
The notes will be collateralized by assets held by the Issuer, a direct subsidiary of Morgan Stanley Direct Lending Fund.
The transaction includes the issuance of $182 million in Class A-1 Senior Secured Floating Rate Notes due 2037, bearing interest at a rate of three-month SOFR + 1.54%.
The transaction also includes the issuance of $16 million in Class A-2 Senior Secured Floating Rate Notes due 2037, bearing interest at a rate of three-month SOFR + 1.70%.
The subordinated notes, totaling $73.2 million, will be retained by Morgan Stanley Direct Lending Fund and will serve as collateral servicer to the Issuer.
The CLO transaction is consolidated by Morgan Stanley Direct Lending Fund and subject to its overall asset coverage requirement under the Investment Company Act of 1940.

Statistics:

$401,200,000: The aggregate principal amount of notes to be issued by the Issuer.
$182,000,000: The principal amount of Class A-1 Senior Secured Floating Rate Notes due 2037.
$50,000,000: The principal amount of Class A-1 Senior Secured Floating Rate Loans due 2037.
$16,000,000: The principal amount of Class A-2 Senior Secured Floating Rate Notes due 2037.
$24,000,000: The principal amount of Class C Secured Deferrable Floating Rate Notes due 2037 and Class D Secured Deferrable Floating Rate Notes due 2037.
$73,200,000: The principal amount of subordinated notes retained by Morgan Stanley Direct Lending Fund.

Sources:

EDGAR Online (via COMTEX)
Securities Exchange Act of 1934
Investment Company Act of 1940