The following is a summary of the Morgan Stanley Direct Lending Fund (MSDL) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Morgan Stanley Direct Lending Fund maintained stable net asset value per share for Q1 2024, despite initial public offering dilution and under-target leverage.

• The Fund generated net investment income per share exceeding the declared dividend of $0.50 per share for the quarter.

• It committed to new investments of approximately $232 million in 30 portfolio companies during the first quarter.

• Total investment income for the first quarter was reported at $99.1 million, slightly down from $100.8 million in Q4 2023.

• The fund operated at 0.81 times levered and out-earned its regular distribution by $0.13 in core net investment income (NII).

• Projections are for $2.20 in ultimate dividends for the current period, including two special dividends at year-end.

Business Progress:

• The Fund views the direct lending environment as highly attractive and anticipates increased deal volumes benefitting from growth in the M&A market.

• The Fund's strategy is defensive, focusing on the upper capital structure and avoiding highly cyclical sectors.

• The Q1 portfolio was valued at $3.3 billion, consisting mainly of first-lien debt, mitigating risk.

• The fund achieved a 12% Return on Equity (ROE) with the current fee waivers.

• The company led or co-led 80% of deals in Q1, demonstrating a growing leadership position.

• They plan to reach target leverage in the coming quarters, with a focus on investment diversification and quality.

• They are considering Collateralized Loan Obligation (CLO) issuance as a balance sheet diversification strategy.

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