Morgan Stanley Direct Lending Fund Announces December 31, 2025 Financial Results and Declares First Quarter 2026 Regular Dividend of $0.45 per Share

NEW YORK, NY, February 26, 2026 — 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 fourth quarter and fiscal year ended December 31, 2025.

QUARTERLY HIGHLIGHTS

 

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Net investment income of $42.4 million, or $0.49 per share, as compared to $43.7 million, or $0.50 per share, for the quarter ended September 30, 2025;

 

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Net asset value of $20.26 per share, as compared to $20.41 as of September 30, 2025;

 

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Debt-to-equity was 1.20x as of December 31, 2025, as compared to 1.17x as of September 30, 2025;

 

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New investment commitments of $146.5 million (net of any syndications), fundings of $163.8 million and sales and repayments of $162.6 million, resulting in net funded deployment of $1.2 million;

 

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The Company’s Board of Directors (the “Board”) declared a regular dividend of $0.50 per share to shareholders of record as of December 31, 2025; and

 

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Subsequent to quarter end, the Company launched Capstone Lending LLC, a joint venture (“JV”) with an institutional partner (the “JV Partner”) with a substantially similar investment strategy as the Company. The Company and the JV Partner each agreed to contribute up to $200.0 million and $50.0 million, respectively, to the JV. Following the initial contribution in February 2026, approximately 47% of the Company’s and JV Partner’s respective total capital commitments were called.

SELECTED FINANCIAL HIGHLIGHTS

 

		For the Quarter Ended
($ in thousands, except per share information)		December 31, 2025				September 30, 2025
Net investment income per share		$	0.49			$	0.50
Net realized and unrealized gains (losses) per share1		($	0.16	)		($	0.18	)
Earnings per share		$	0.33			$	0.32
Regular dividend per share		$	0.50			$	0.50
1   Amount shown may not correspond for the period as it may include the effect of the timing of the distribution, shares repurchased and the issuance of common stock.
		As of
($ in thousands, except per share information)		December 31, 2025				September 30, 2025
Investments, at fair value		$	3,771,546			$	3,775,797
Total debt outstanding, at principal		$	2,093,153			$	2,078,120
Net assets		$	1,748,089			$	1,771,611
Net asset value per share		$	20.26			$	20.41
Debt to equity			1.20x				1.17x
Net debt to equity			1.14x				1.13x

RESULTS OF OPERATIONS

Total investment income for the quarter ended December 31, 2025 was $96.6 million, compared to $99.7 million for the quarter ended September 30, 2025. The decrease was primarily driven by lower base rates partially offset by repayment related income.

 

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Total net expenses for the quarter ended December 31, 2025 were $54.2 million, compared to $56.0 million for the quarter ended September 30, 2025. The decrease was primarily driven by a reduction in our incentive fee earned due to our incentive fee cap.

Net investment income for the quarter ended December 31, 2025 was $42.4 million, or $0.49 per share, compared to $43.7 million, or $0.50 per share, for the quarter ended September 30, 2025.

For the quarter ended December 31, 2025, net change in unrealized depreciation was $5.6 million and net realized losses were $8.1 million.

PORTFOLIO AND INVESTMENT ACTIVITY

As of December 31, 2025, the Company’s investment portfolio had a fair value of approximately $3.8 billion, comprised of 227 portfolio companies across 35 industries, with an average investment size of $16.6 million, or 0.4% of our total portfolio on a fair value basis. The composition of the Company’s investments was the following:

 

		December 31, 2025												September 30, 2025
($ in thousands)		Cost				Fair Value				% of Total Investments at Fair Value				Cost				Fair Value				% of Total Investments at Fair Value
First Lien Debt		$	3,686,118			$	3,631,498				96.2	%		$	3,686,876			$	3,638,914				96.3	%
Second Lien Debt			83,428				75,210				2.0				82,757				72,101				1.9
Other Debt Investments			11,857				10,114				0.3				11,566				9,954				0.3
Equity			57,636				54,724				1.5				56,523				54,828				1.5
Total		$	3,839,039			$	3,771,546				100.0	%		$	3,837,722			$	3,775,797				100.0	%

Investment activity was as follows:

 

Investment Activity:		Year Ended December 31, 2025				Three Months Ended December 31, 2025				Three Months Ended September 30, 2025
New investment commitments, at par		$	711,948			$	146,477			$	183,049
Investment fundings		$	771,395			$	163,792			$	197,953
Number of new investment commitments in portfolio companies			44				17				9
Number of portfolio companies exited or fully repaid			25				8				5

Total weighted average yield of investments in debt securities at amortized cost and fair value was 9.3% and 9.5%, respectively, as of December 31, 2025, compared to 9.7% and 9.9%, respectively, as of September 30, 2025. Floating rate debt investments as a percentage of total portfolio on a fair value basis was 99.6% as of December 31, 2025, unchanged compared to September 30, 2025. As of December 31, 2025, certain investments in four portfolio companies were on non-accrual status, representing approximately 1.6% of total investments at amortized cost.

CAPITAL AND LIQUIDITY

As of December 31, 2025, the Company had total principal debt outstanding of $2,093.2 million, including $351.0 million outstanding in the Company’s BNP funding facility, $308.2 million outstanding in the Company’s Truist credit facility, $425.0 million outstanding in the Company’s senior unsecured notes due February 2027, $350.0 million outstanding in the Company’s senior unsecured notes due May 2029, $350.0 million outstanding in the Company’s senior unsecured notes due May 2030 and $309.0 million outstanding in the Company’s inaugural CLO that closed in September 2025.

 

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The combined weighted average interest rate on debt outstanding was 5.61% for the quarter ended December 31, 2025. As of December, 31, 2025, the Company had $1,381.1 million of availability under its credit facilities and $90.6 million in unrestricted cash and short term, liquid investments. Debt to equity was 1.20x and 1.17x as of December 31, 2025 and September 30, 2025, respectively.

SHARE REPURCHASES

On February 27, 2025, the Board authorized an amended and restated share repurchase program (“2025 Share Repurchase Program”), which had a maximum size of $100.0 million, exclusive of the utilization of prior programs. For the three months ended December 31, 2025, the Company repurchased 534,908 shares at an average price of $17.03 per share.

On February 26, 2026, the Board authorized the Company’s new share repurchase program under which the Company can repurchase up to $100 million in the aggregate of the Company’s common stock, par value $0.001 per share, exclusive of the utilization of prior programs, at prices below the net asset value per share over a 24-month period. This new share repurchase program replaces in its entirety the Company’s 2025 Shares Repurchase Program.

ATM OFFERING

On March 28, 2025, the Company entered into equity distribution agreements pursuant to which the Company may sell shares of the Company’s common stock having an aggregate offering price of up to $300.0 million. For the quarter and year ended December 31, 2025, there were no shares issued through the ATM offering.

JOINT VENTURE

Subsequent to quarter end, the Company launched Capstone Lending LLC, a JV with the JV Partner with a substantially similar investment strategy as the Company. The Company and the JV Partner each agreed to contribute up to $200.0 million and $50.0 million, respectively, to the JV. Following the initial contribution in February 2026, approximately 47% of the Company’s and JV Partner’s respective total capital commitments were called.

OTHER DEVELOPMENTS

On February 26, 2026, the Board declared a regular distribution of $0.45 per share, which is payable on or around April 24, 2026 to shareholders of record as of March 31, 2026.

CONFERENCE CALL INFORMATION

Morgan Stanley Direct Lending Fund will host a conference call on Friday, February 27, 2026 at 10:00 am ET to review its financial results and conduct a question-and-answer session. All interested parties are invited to participate in the live earnings conference call by using the following dial-in numbers or audio webcast link available on the MSDL Investor Relations website:

 

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Audio Webcast

 

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Conference Call

 

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Domestic: 800-330-6710

 

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International: +1 213-279-1505

 

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Passcode: 8218038

To avoid potential delays, please join at least 10 minutes prior to the start of the earnings call. An archived replay will also be available on the MSDL Investor Relations website.

 

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About Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund (NYSE: MSDL) is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. MSDL has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. MSDL is externally managed by MS Capital Partners Adviser Inc., an indirect, wholly owned subsidiary of Morgan Stanley. MSDL is not a subsidiary of or consolidated with Morgan Stanley. For more information about Morgan Stanley Direct Lending Fund, please visit www.msdl.com.

Forward-Looking Statements

Statements included herein or on the webcast/conference call may constitute “forward-looking statements,” which relate to future events or MSDL’s future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results and conditions may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in MSDL’s filings with the U.S. Securities and Exchange Commission. MSDL undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call.

Contacts

 

Investors Sanna Johnson, Head of Investor Relations msdl@morganstanley.com		Media Alyson Barnes 212-762-0514 alyson.barnes@morganstanley.com

 

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Consolidated Statements of Assets and Liabilities (Audited)

(In thousands, except share and per share amounts)

 

		As of
		December 31, 2025				December 31, 2024
		(Audited)				(Audited)
Assets
Non-controlled/non-affiliated investments, at fair value (amortized cost of $3,833,800 and $3,813,127)		$	3,766,757			$	3,791,494
Non-controlled/affiliated investments, at fair value (amortized cost of $5,239 and $0)			4,789				—
Total investments, at fair value (cost of $3,839,039 and $3,813,127)			3,771,546				3,791,494
Cash and cash equivalents (restricted cash of $3,820 and $2,000)			81,434				63,396
Investments in unaffiliated money market fund (cost of $12,976 and $8,976)			12,976				8,976
Deferred financing costs			16,874				16,498
Interest and dividend receivable from non-controlled/non-affiliated investments			26,332				30,554
Interest receivable from non-controlled/affiliated investments			89				—
Receivable for investments sold/repaid			455				470
Prepaid expenses and other assets			10,390				630
Total assets			3,920,096				3,912,018
Liabilities
Debt (net of unamortized debt issuance costs of $10,545 and $6,527)			2,086,672				1,973,479
Payable for investment purchased			—				192
Payable to affiliates (Note 3)			91				29
Dividends payable			43,222				53,229
Management fees payable			9,596				7,042
Income based incentive fees payable			7,281				8,956
Interest payable			20,945				21,205
Accrued expenses and other liabilities			4,200				5,730
Total liabilities			2,172,007				2,069,862
Commitments and contingencies (Note 7)
Net assets
Preferred stock, $0.001 par value (1,000,000 shares authorized; no shares issued and outstanding)			—				—
Common stock, par value $0.001 (500,000,000 shares authorized; 86,276,305 and 88,511,089 shares issued and outstanding)			86				89
Paid-in capital in excess of par value			1,767,623				1,812,443
Total distributable earnings (loss)			(19,620	)			29,624
Total net assets		$	1,748,089			$	1,842,156
Total liabilities and net assets		$	3,920,096			$	3,912,018
Net asset value per share		$	20.26			$	20.81

 

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Consolidated Statements of Operations (Audited)

(In thousands, except share amounts)

 

		For the Year Ended
		December 31, 2025				December 31, 2024				December 31, 2023
Investment Income:
From non-controlled/non-affiliated investments:
Interest income		$	371,811			$	396,421			$	355,530
Payment-in-kind			15,623				10,709				4,276
Dividend income			2,849				2,591				2,124
Other income			6,558				6,354				5,808
From non-controlled/affiliated investments:
Interest income			150				—				—
Payment-in-kind			250				—				—
Dividend income			46				—				—
Total investment income			397,287				416,075				367,738
Expenses:
Interest and other financing expenses			136,132				122,928				112,883
Management fees			38,466				35,415				30,550
Income based incentive fees			35,685				43,467				42,012
Professional fees			8,017				6,718				4,470
Directors’ fees			517				533				345
Administrative service fees			287				216				178
General and other expenses			359				97				633
Total expenses			219,463				209,374				191,071
Management fees waiver (Note 3)			(641	)			(9,936	)			(22,913	)
Incentive fees waiver (Note 3)			(375	)			(6,035	)			—
Net expenses			218,447				193,403				168,158
Net investment income (loss) before taxes			178,840				222,672				199,580
Excise tax expense			2,814				2,437				1,519
Net investment income (loss) after taxes			176,026				220,235				198,061
Net realized and unrealized gain (loss):
Net realized gain (loss) on non-controlled/non-affiliated investments			(7,480	)			(16,480	)			118
Foreign currency and other transactions			58				13				—
Net realized gain (loss)			(7,422	)			(16,467	)			118
Net change in unrealized appreciation (depreciation):
Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated investments			(46,138	)			11,904				32,835
Net change in unrealized appreciation (depreciation) on non-controlled/affiliated investments			(450	)			—				—
Translation of assets and liabilities in foreign currencies			78				(108	)			—
Net unrealized appreciation (depreciation)			(46,510	)			11,796				32,835
Net realized and unrealized gain (loss)			(53,932	)			(4,671	)			32,953
Net increase (decrease) in net assets resulting from operations		$	122,094			$	215,564			$	231,014
Earnings per share (basic and diluted)		$	1.40			$	2.43			$	3.11
Weighted average shares outstanding			87,270,081				88,649,149				74,239,743

 

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