Morgan Stanley Direct Lending Fund (NYSE:MSDL)

Q3 2024 Morgan Stanley Direct Lending Fund Earnings Call Transcript

Nov 08, 2024 / 03:00PM GMT

Release Date Price: $20.24 (+0.10%)

Transcript 8-K10-Q

Key Points

Positve

Morgan Stanley Direct Lending Fund (MSDL) reported a stable net asset value (NAV) per share of $20.83, unchanged from the previous quarter.
The fund generated a net investment income of $0.66 per share, exceeding the regular dividend of $0.50 per share and a special dividend of $0.10.
MSDL's deployment activity showcased strong origination capabilities, with new investment commitments of approximately $455 million in 37 portfolio companies.
The fund's portfolio is diversified across 33 industries, with nearly 100% of investments in floating rate debt, providing resilience against interest rate fluctuations.
MSDL maintained a strong credit quality, with over 98% of the portfolio having an internal risk rating of two or better, and only two portfolio companies on non-accrual status.

Negative

MSDL's debt to NAV ratio increased from 0.9 times to 0.99 times, approaching the low end of their target leverage range.
The weighted average yield on debt and income-producing investments decreased by 60 basis points quarter over quarter.
The fund experienced net realized losses of $11 million during the quarter.
Investment funding totaled $377 million, with $253 million in repayments, resulting in a net funded investment activity of only $124 million.
The logistics sector within the portfolio showed increased softness, prompting a more cautious investment approach.

Operator

Please stand by. Welcome to the Morgan Stanley Direct Lending Funds third quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference call is being recorded.

At this time. I'd like to turn the call over to Michael Occi, Head of Investor Relations and Chief Administrative Officer. Please go ahead.

Michael Occi

Morgan Stanley Direct Lending Fund - Head of Investor Relations & Chief Administrative Officer

Good morning and welcome to Morgan Stanley Direct Lending Funds third quarter 2024 earnings call. Joining me this morning are Jeff Levin, President and Chief Executive Officer; David Pessah, Chief Financial Officer; and Rebecca Shaoul, Head of Portfolio Management.

Morgan Stanley Direct Lending Funds third quarter 2024 financial results were released yesterday after market close and can be accessed on the investor relations section of our website at www.msdl.com. We have arranged for a replay of today's event that will be accessible from the Morgan Stanley

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