Morgan Stanley Direct Lending Fund

MSDL

Market cap $1.49B

BDCs are facing pressures from multiple fronts. Yet, they do not have much ammo left to fight back via portfolio growth. This is not good for shareholder and BDC managers, who earn fees based on asset size and earnings results.

MSDL has glided into a deep discount territory. In the meantime, the dividend has remained covered and offers now a yield close to 12%. Since 95% of MSDL's portfolio lies in non-cyclical sectors, there might be a case for locking in a high-quality 12% yield.

The Fed's dovishness has been the key driver for the BDC sell-off. The idea is that lower interest rates should lead to lower dividends (i.e., BDCs cutting their dividend across the board). While it is a process that takes time, the current data show that many BDCs are well-positioned to safeguard their existing dividends.

BDCs have had a rough year so far. Yet, Q3 earnings data points indicate that the tide could be turning. While there are some tangible improvements in BDC business environment, many risks remain open.

Morgan Stanley Direct Lending offers a compelling 12% yield and trades at a bargain 0.82x price-to-book, near its all-time low. MSDL has a conservatively managed, diversified portfolio of senior secured loans with low non-accruals and strong interest coverage. Despite tight dividend coverage, spillover income and shareholder-friendly buybacks provide support for the dividend.

Morgan Stanley Direct Lending Fund ( MSDL ) Q3 2025 Earnings Call November 7, 2025 10:00 AM EST Company Participants Sanna Johnson Michael Occi - CEO & Director David Pessah - Chief Financial Officer Rebecca Shaoul - Managing Director Conference Call Participants Melissa Wedel - JPMorgan Chase & Co, Research Division Robert Dodd - Raymond James & Associates, Inc., Research Division Kenneth Lee - RBC Capital Markets, Research Division Ethan Kaye - Lucid Capital Markets, LLC, Research Division Presentation Operator Welcome to Morgan Stanley Direct Lending Fund Third Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded.

Morgan Stanley Direct Lending Fund (MSDL) came out with quarterly earnings of $0.5 per share, beating the Zacks Consensus Estimate of $0.49 per share. This compares to earnings of $0.66 per share a year ago.

NEW YORK--(BUSINESS WIRE)--Morgan Stanley Direct Lending Fund (NYSE: MSDL) (“MSDL” or the “Company”), a business development company externally managed by MS Capital Partners Adviser Inc. (the “Adviser”), today announced its financial results for the third quarter ended September 30, 2025. QUARTERLY HIGHLIGHTS Net investment income of $43.7 million, or $0.50 per share, as compared to $43.7 million, or $0.50 per share, for the quarter ended June 30, 2025; Net asset value of $20.41 per share, as.

Morgan Stanley Direct Lending offers compelling value, trading at a significant discount to NAV and near 52-week lows. MSDL's portfolio is defensive, with low leverage and a focus on first-lien loans, reducing overall risk compared to peers. Despite concerns about fixed-rate obligations, the risks to MSDL's earnings from interest rate changes are likely overstated.

BDCs have been clearly out of favor this year. Yet, there are some clear pockets of opportunity, which have started to showcase a nice momentum - just as I outlined in my recent BDC strategic piece. It does not mean, however, that all deep-discount BDCs will recover.