Morgan Stanley Direct Lending Fund Files 10-K for Fiscal Year Ended December 31, 2023

TL;DR

<b>Morgan Stanley Direct Lending Fund (MSDL) has filed its annual 10-K report for the fiscal year ending December 31, 2023, detailing its financial performance and business operations.</b>

AI Summary

Morgan Stanley Direct Lending Fund (MSDL) filed a Annual Report (10-K) with the SEC on March 1, 2024. Morgan Stanley Direct Lending Fund (MSDL) filed its 10-K report for the fiscal year ending December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company is incorporated in Delaware (DE). Its principal business address is 1585 Broadway, New York, NY 10036. The filing number with the SEC is 814-01332.

Why It Matters

For investors and stakeholders tracking Morgan Stanley Direct Lending Fund, this filing contains several important signals. This 10-K filing provides a comprehensive overview of MSDL's financial health, investment portfolio, and strategic direction for the past fiscal year, crucial for investors assessing its performance. The detailed information within the 10-K allows stakeholders to understand the fund's asset base, liabilities, and overall market position, aiding in investment decisions.

Risk Assessment

Risk Level: low — Morgan Stanley Direct Lending Fund shows low risk based on this filing. The filing is a standard 10-K, which is a routine annual report and does not contain immediate red flags or significant new risks beyond those typically associated with a publicly traded investment fund.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand MSDL's performance and potential risks for the upcoming fiscal year.

Key Numbers

• 2023-12-31 — Fiscal Year End (The end date of the reporting period)
• 2024-03-01 — Filing Date (The date the 10-K was filed)
• 814-01332 — SEC File Number (The SEC file number for the company)

Key Players & Entities

• Morgan Stanley Direct Lending Fund (company) — Filer of the 10-K report
• MSDL (company) — Ticker symbol for Morgan Stanley Direct Lending Fund
• 1934 Act (regulator) — Securities Exchange Act under which the filing was made
• DE (company) — State of incorporation
• 212 761 0380 (dollar_amount) — Business phone number

FAQ

Industry Context

Morgan Stanley Direct Lending Fund operates as a business development company (BDC) that invests primarily in the debt of U.S. middle-market companies.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to disclose material information about their business and financial condition.

What Investors Should Do

1. Analyze the fund's investment portfolio composition and performance metrics for FY 2023.
2. Examine any disclosed changes in investment strategy or risk management practices.
3. Review the management's discussion and analysis (MD&A) for insights into future outlook and challenges.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K filing.
• 2024-03-01: Filing Date — The date the 10-K report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial 10-K filing for the fiscal year ending December 31, 2023, following previous filings for earlier periods.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share MSDL The New York
• $15 million — r EBITDA, in the range of approximately $15 million to $200 million, although not all of ou
• $200 m — e range of approximately $15 million to $200 million, although not all of our portfoli
• $20.67 — mon Stock at a public offering price of $20.67 per share. Net of underwriting fees, we
• $97.1 million — ore offering expenses, of approximately $97.1 million. Our Common Stock began trading on The
• $18.5 billion — the MS BDCs, and managed approximately $18.5 billion in committed capital 1 as of January 1,
• $200 million — not always, with annual EBITDA of up to $200 million. As of January 1, 2024, Direct Lending
• $15.6 billion — 4, Direct Lending managed approximately $15.6 billion in committed capital. Opportunistic Cr
• $10 million — hough not always, with annual EBITDA of $10 million to $100+ million. As of January 1, 2024
• $100 — s, with annual EBITDA of $10 million to $100+ million. As of January 1, 2024, Opport
• $2.9 billion — ortunistic Credit managed approximately $2.9 billion in committed capital. Our Adviser's i
• $1.5 — mber 31, 2023, IM managed approximately $1.5 trillion in assets under management acr

Filing Documents

• msdlf-20231231.htm (10-K) — 10317KB
• exhibit41descriptionofsecu.htm (EX-4.1) — 41KB
• ex211subsidiariesoftheregi.htm (EX-21.1) — 6KB
• a20231231exhibit311.htm (EX-31.1) — 10KB
• a20231231exhibit312.htm (EX-31.2) — 10KB
• a20231231exhibit321.htm (EX-32.1) — 5KB
• a20231231exhibit322.htm (EX-32.2) — 5KB
• exhibit997clawbackpolicy.htm (EX-99.7) — 35KB
• msdlf-20231231_g1.jpg (GRAPHIC) — 9KB
• msdlf-20231231_g2.jpg (GRAPHIC) — 10KB
• 0001782524-24-000009.txt (&nbsp;) — 26795KB
• msdlf-20231231.xsd (EX-101.SCH) — 54KB
• msdlf-20231231_cal.xml (EX-101.CAL) — 63KB
• msdlf-20231231_def.xml (EX-101.DEF) — 309KB
• msdlf-20231231_lab.xml (EX-101.LAB) — 692KB
• msdlf-20231231_pre.xml (EX-101.PRE) — 483KB
• msdlf-20231231_htm.xml (XML) — 6749KB

Risk Factors

Item 1A. Risk Factors 34

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 66

Cybersecurity

Item 1C. Cybersecurity 66

Properties

Item 2. Properties 68

Legal Proceedings

Item 3. Legal Proceedings 68

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 68 Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 68

[ Reserved ]

Item 6. [ Reserved ] 70

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 71

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 80

Consolidated Financial Statements and Supplementary Data

Item 8. Consolidated Financial Statements and Supplementary Data 82

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 149

Controls and Procedures

Item 9A. Controls and Procedures 149

Other Information

Item 9B. Other Information 149

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 149 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 149

Executive Compensation

Item 11. Executive Compensation 150

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 150

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 150

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 150 Part IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 151

SIGNATURES

SIGNATURES 2 T a b l e o f C o n t e n t s EXPLANATORY NOTE In this report, except where the context suggests otherwise: the terms "we," "us," "our," and the "Company" refer to Morgan Stanley Direct Lending Fund, a Delaware corporation, together with its consolidated subsidiaries, where applicable; the terms "Morgan Stanley" or the "Firm" refer to Morgan Stanley (NYSE: MS) and its consolidated subsidiaries. For the avoidance of doubt, we are not a subsidiary of or consolidated with Morgan Stanley. Furthermore, Morgan Stanley has no obligation, contractual or otherwise, to financially support us. Morgan Stanley has no history of financially supporting any of the other MS BDCs, even during periods of financial distress; the term "IM" refers to the Morgan Stanley Investment Management platform, which is Morgan Stanley's investment management unit and represents one of Morgan Stanley's three business segments; the term "MS Private Credit" refers to the U.S. private credit strategies within the private credit platform of IM; the terms "Adviser" or "Investment Adviser" refer to MS Capital Partners Adviser Inc., our investment adviser, an indirect, wholly owned and consolidated subsidiary of Morgan Stanley; the term "Administrator" refers to MS Private Credit Administrative Services LLC, our administrator, an indirect, wholly owned and consolidated subsidiary of Morgan Stanley; the term "MS BDCs" refers to the Company and the other business development companies, or BDCs, managed by our Adviser; the term "Common Stock" refers to our common stock, par value $0.001 per share; and references to "this Form 10-K" and "this report" are to this Annual Report on Form 10-K for the year ended December 31, 2023. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report, including the documents we incorporate by reference into this report, contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known

Business

Item 1. Business We are a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. We have elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the "1940 Act"). For U.S. federal income tax purposes, we have elected to be treated, and intend to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code. We are externally managed by the Adviser, an indirect, wholly owned subsidiary of Morgan Stanley. We are not a subsidiary of, or consolidated with, Morgan Stanley. Our investment objective is to achieve attractive risk-adjusted returns via current income and, to a lesser extent, capital appreciation by investing primarily in directly originated senior secured term loans issued by U.S. middle-market companies in which private equity sponsors have a controlling equity stake in the portfolio company . For the purposes of this report, "middle-market companies" refers to companies that, in general, generate annual earnings before interest, taxes, depreciation and amortization, or EBITDA, in the range of approximately $15 million to $200 million, although not all of our portfolio companies will meet this criterion. We invest primarily in directly originated senior secured term loans including first lien senior secured term loans (including unitranche loans) and second lien senior secured term loans, with the balance of our investments expected to be in higher-yielding assets such as mezzanine debt, unsecured debt, equity investments and other opportunistic asset purchases. Typical middle-market senior loans may be issued by middle-market companies in the context of leveraged buyouts, or LBOs, acquisitions, debt refinancings, recapitalizations, and other similar transactions. We generally expect our debt investments to have a stated term of five to eight years and typically to bear interest at a floating rate usually determined on the basis of a benchmark s

View Full Filing

View this 10-K filing on SEC EDGAR