Q3 2025 Morgan Stanley Direct Lending Fund Earnings Call Transcript
Key Points
- Morgan Stanley Direct Lending Fund (MSDL) generated solid performance in the third quarter with net investment income of $0.50 per share, consistent with the previous quarter.
- MSDL committed $183 million to new investments, marking a 23% increase compared to the second quarter, indicating strong deal activity.
- The fund's origination engine is robust, with nearly 75% of non-refinancing volume driven by new platforms, showcasing strong market positioning.
- MSDL's portfolio is well-diversified, with 96% first lien debt and exposure across 33 industries, reducing risk concentration.
- The fund benefits from Morgan Stanley's global resources, enhancing its ability to source and execute deals effectively.
- The weighted average yield on debt and income-producing investments declined by approximately 35 basis points quarter over quarter, primarily due to a decline in base rates.
- Two new positions were placed on nonaccrual status, indicating some credit quality concerns within the portfolio.
- The net change in unrealized losses was $16.2 million, driven by underperformance in certain portfolio companies.
- The debt-to-equity ratio increased to 1.17 times, slightly higher than the previous quarter, which may indicate increased leverage.
- The ending NAV per share decreased from $20.59 to $20.41, reflecting a slight decline in asset value.
Welcome to Morgan Stanley Direct Lending Fund third quarter 2025 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 Sanna Johnson. Please go ahead.
Good morning, and welcome to Morgan Stanley Direct Lending Fund's third quarter 2025 earnings call. I am joined this morning by Michael Occi, Chief Executive Officer; Ashwin Krishnan, Chief Investment Officer; Jeff Day, Co-President; David Pessah, Chief Financial Officer; and Rebecca Shaoul, Head of Portfolio Management.
Morgan Stanley Direct Lending Fund's third quarter 2025 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 Direct Lending Fund website.
During this call, I want to remind
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