Morgan Stanley Direct Lending Fund
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
MSDL$13.62-3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001782524-25-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-269438
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 154 previous paragraphs and 149 current paragraphs.
118 unchanged; 26 reworded; 3 added; 9 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 12 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Additionally, for the three and nine months ended September 30, 2025, we recorded $1,560 and $5,009, respectively, of non-recurring interest income (e.g., prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts, etc.) as compared to $2,104 and $4,555, respectively, for the same periods in the prior year, primarily as a result of prepayments.
Current report
Represents a special distribution declared by the Board on January 11, 2024.
Current report
Purchased under the Original Company 10b5-1 Plan
Removed paragraphs (9)
Previous report
In the table above, total investment income decreased from $104,188 for the three months ended June 30, 2024 to $99,508 for the three months ended June 30, 2025 and from $203,289 for the six months ended June 30, 2024 to $200,966 for the six months ended
Previous report
On July 24, 2025, our Board of Directors, or the Board, appointed Michael Occi, as a director and as our Chief Executive Officer, effective July 25, 2025, to fill the vacancy on the Board and to succeed Jeffrey Levin as our chief executive officer following Mr. Levin’s resignation.
Previous report
In addition, on July 24, 2025, our Board appointed Ashwin Krishnan as our Chief Investment Officer of us and appointed Orit Mizrachi and Jeffrey Day as Co-Presidents of us, all of which were effective on July 25, 2025.
Previous report
Our Adviser’s investment committee, or the Investment Committee, is currently comprised of nine individuals: David N. Miller, Michael Occi, Ashwin Krishnan, Jeffrey Day, David Kulakofsky, Henry ‘Hank’ D’Alessandro, Toby Norris, Jon Spivak and Rebecca Shaoul. Messrs. Occi, and Spivak and Ms. Shaoul were appointed members of the Investment Committee in July 2025, and biographical information for Mr. Spivak and Ms. Shaoul is as follows:
Previous report
Jon Spivak is a Managing Director of Morgan Stanley and a member of the Morgan Stanley Private Credit team, where he serves on the Investment Committee and focuses on originating and underwriting investment opportunities. Mr. Spivak also serves as the Portfolio Manager on various investment vehicles. Mr. Spivak joined Morgan Stanley in 2017 and has over 16 years of relevant industry experience. Prior to joining Morgan Stanley, Mr. Spivak was a Vice President at Tree Line Capital Partners where he was responsible for the origination, execution, and portfolio management of direct lending investments across a wide range of industries. Mr. Spivak also worked at Enhanced Capital Partners, an affiliate of Tree Line, where he held a similar role and served as an Investment Manager of its Small Business Investment Company. Mr. Spivak began his career at Bank of America Merrill Lynch in the Structured Equity Finance group, investing the bank’s balance sheet in various parts of the capital structure. Mr. Spivak holds a B.A. from the University of Pennsylvania and an MBA from the University of Chicago Booth School of Business.
Previous report
Rebecca Shaoul is a Managing Director of Morgan Stanley and member of the Morgan Stanley Private Credit team, where she serves on the Investment Committee and as Head of Portfolio Management for the Direct Lending strategy. Ms. Shaoul joined Morgan Stanley in 2020 and has over 15 years of relevant industry experience. Prior to joining Morgan Stanley, Ms. Shaoul was a Director at Madison Capital Funding where she oversaw the underwriting, execution and portfolio management efforts for the Healthcare vertical and previously held various underwriting and execution roles focused on generalist transactions. Prior to joining Madison Capital, Ms. Shaoul held various underwriting and portfolio management roles at Wintrust Financial Corporation. Ms. Shaoul earned a B.S. in Finance from the University of Maryland.
Previous report
On August 6, 2025, North Haven Private Credit CLO 1 LLC (the “Issuer”), a direct subsidiary, established pricing terms for a collateralized loan obligation (“CLO”) transaction and the notes to be issued by the Issuer.
Previous report
The Issuer expects to issue approximately $401,200,000 in aggregate principal amount of notes collateralized by the assets held by the Issuer, consisting of $182,000,000 in Class A-1 Senior Secured Floating Rate Notes due 2037 and $50,000,000 in Class A-1 Senior Secured Floating Rate Loans due 2037, which will bear interest at a rate of three-month SOFR + 1.54%, $16,000,000 in Class A-2
Previous report
Senior Secured Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 1.70%, $24,000,000 in Class B Senior Secured Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 1.90%, $32,000,000 in Class C Secured Deferrable Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 2.40%, and $24,000,000 in Class D Secured Deferrable Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 3.55%. We will retain approximately $73,200,000 in Subordinated Notes due 2125 to be issued by the Issuer, which represent all of the Subordinated Notes of the Issuer, and will serve as Collateral Servicer to the Issuer. The CLO transaction is a form of secured financing incurred by us and is consolidated by us and subject to its overall asset coverage requirement under the Investment Company Act of 1940, as amended. The CLO transaction is anticipated to close on or about September 17, 2025.
Reworded paragraphs (26)
Previous wording
1 Calculated as a percentage of gross debt commitments (funded and unfunded). Weighted average EBITDA, net leverage through the tranche that the Company is a lender, interest coverage and loan to value exclude recurring revenue investments, which are investments in portfolio companies in which the Company lends based on a multiple of recurring revenue generated by the portfolio company and not based on a multiple of EBITDA.
Current wording
1 Calculated as a percentage of gross debt commitments (funded and unfunded). Weighted average EBITDA, net leverage through the tranche that the Company is a lender, weighted average interest coverage and weighted average loan to value exclude recurring revenue investments, which are investments in portfolio companies in which the Company lends based on a multiple of recurring revenue generated by the portfolio company and not based on a multiple of EBITDA.
Previous wording
4 Net leverage is the ratio of total debt minus cash divided by EBITDA and taking into account leverage through the tranche that the Company is a lender, excluding recurring revenue investments.
Current wording
5 Net leverage is calculated as the ratio of total debt minus cash divided by EBITDA and taking into account leverage through the tranche that the Company is a lender, excluding recurring revenue investments.
Previous wording
5 Interest coverage for a particular portfolio company is calculated by taking credit agreement EBITDA and dividing by annualized latest reported interest expense. Total interest coverage is calculated on a weighted average basis based on total gross debt commitments (funded and unfunded). Calculation excludes recurring revenue deals which are investments in portfolio companies in which the Company lends based on a multiple of recurring revenue generated by the portfolio company and not based on a multiple of EBITDA. Portfolio company statistics are derived from the most recently available financial statements of each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount.
Current wording
6 Interest coverage for a particular portfolio company is calculated by taking credit agreement EBITDA and dividing by annualized latest reported interest expense. Total interest coverage is calculated on a weighted average basis based on total gross debt commitments (funded and unfunded). Calculation excludes recurring revenue deals which are investments in portfolio companies in which the Company lends based on a multiple of recurring revenue generated by the portfolio company and not based on a multiple of EBITDA. Portfolio company statistics are derived from the most recently available financial statements of each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount.
Previous wording
6 Calculated using total outstanding debt through the tranche that the Company is a lender divided by total enterprise value from the private equity sponsor or market comparables.
Current wording
7 Calculated using total outstanding debt through the tranche that the Company is a lender divided by total enterprise value from the private equity sponsor or market comparables.
Previous wording
(1)Includes new investment commitments, excluding sale/repayments and including new unfunded investment commitments.
Current wording
Includes new investment commitments, excluding sale/repayments and including new unfunded investment commitments.
Previous wording
(2)Represents dollar amount of other investments funded.
Current wording
Represents dollar amount of other investments funded.
Previous wording
Risk Rating 1 — In the opinion of our Investment Adviser, investments in Risk Rating 1 involve the least amount of risk relative to our initial cost basis at the time of origination or acquisition. Risk Rating 1 investments performance is above our initial underwriting expectations and the business trends and risk factors are generally favorable, which may include the performance of the portfolio company, or the likelihood of a potential exit.
Current wording
Risk Rating 1 — In the opinion of our Investment Adviser, investments in Risk Rating 1 involve the least amount of risk relative to our initial cost basis at the time of origination or acquisition. Risk Rating 1 investments performance is above our initial underwriting expectations and the business trends and risk factors are generally favorable, which trends or factors may include the performance of the portfolio company, or the likelihood of a potential exit.
Previous wording
Risk Rating 3 — In the opinion of our Investment Adviser, investments in Risk Rating 3 indicate that the risk to our ability to recoup the initial cost basis at the time of origination or acquisition has increased materially since the origination or acquisition of the investment, such as declining financial performance and non-compliance with debt covenants; however, principal and interest payments are not more than 120 days past due.
Current wording
Risk Rating 3 — In the opinion of our Investment Adviser, investments in Risk Rating 3 indicate that the risk to our ability to recoup the initial cost basis at the time of origination or acquisition has increased materially since the origination or acquisition of the investment, such as due to declining financial performance and non-compliance with debt covenants; however, principal and interest payments are not more than 120 days past due.
Previous wording
June 30, 2025. The decrease was primarily driven by declining base rates and repricing on our existing portfolio which impacted our weighted average yield. Our weighted average yield at cost decreased to 10.1% as of June 30, 2025 from 11.6% as of June 30, 2024.
Current wording
In the table above, total investment income decreased from $109,752 for the three months ended September 30, 2024 to $99,722 for the three months ended September 30, 2025 and from $313,041 for the nine months ended September 30, 2024 to $300,690 for the nine months ended September 30, 2025. The decrease was primarily driven by declining base rates and repricing on our existing portfolio which impacted our weighted average yield. Our weighted average yield at cost decreased to 9.7% as of September 30, 2025 from 11.0% as of September 30, 2024.
Previous wording
Interest and other financing expenses, including unused commitment fees, amortization of debt issuance costs, net change in unrealized (appreciation) depreciation on effective interest rate swaps and hedged items and deferred financing costs, increased to $34,707 for the three months ended June 30, 2025 from $29,302 for the three months ended June 30, 2024 and to $68,886 for the six months ended June 30, 2025 from $56,562 for the six months ended June 30, 2024. The increase was primarily due to higher average borrowings outstanding for the three and six months ended June 30, 2025. For the three months ended June 30, 2025 and June 30, 2024, average borrowings outstanding were $2,046,092 and $1,578,492 respectively, which were offset by the reduction of our average interest rate which decreased from 6.57% to 6.02%, for the three months ended June 30, 2024 and June 30, 2025 respectively. For the six months ended June 30, 2025 and June 30, 2024, average borrowings outstanding were $2,038,571 and $1,520,644 respectively, which was offset by the reduction of our average interest rate which decreased from 6.63% to 6.06%, for the six months ended June 30, 2024 and June 30, 2025 respectively.
Current wording
Interest and other financing expenses, including unused commitment fees, amortization of debt issuance costs, net change in unrealized (appreciation) depreciation on effective interest rate swaps and hedged items and deferred financing costs, increased to $33,903 for the three months ended September 30, 2025 from $33,153 for the three months ended September 30, 2024 and to $102,788 for the nine months ended September 30, 2025 from $89,715 for the nine months ended September 30, 2024. The increase was primarily due to higher average borrowings outstanding for the three and nine months ended September 30, 2025. For the three months ended September 30, 2025 and September 30, 2024, average borrowings outstanding were $2,021,437 and $1,799,879, respectively, which were offset by the reduction of our average interest rate which decreased from 6.45% to 5.85%, for the three months ended September 30, 2024 and September 30, 2025, respectively. For the nine months ended September 30, 2025 and September 30, 2024, average borrowings outstanding were $2,032,797 and $1,614,402, respectively, which was offset by the reduction of our average interest rate which decreased from 6.56% to 5.96%, for the nine months ended September 30, 2024 and September 30, 2025, respectively.
Previous wording
Base management fees, net of waiver, were $9,624 and $18,601 for the three and six months ended June 30, 2025 and $6,479 and $11,612 for the three and six months ended June 30, 2024, respectively. The increase was primarily due to an increase in average gross assets. In addition, the management fee waiver expired on January 24, 2025
Current wording
Base management fees, net of waiver, were $9,628 and $28,229 for the three and nine months ended September 30, 2025 and $6,825 and $18,437 for the three and nine months ended September 30, 2024, respectively. The increase was primarily due to an increase in average gross assets. In addition, the management fee waiver expired on January 24, 2025.
Previous wording
The incentive fee consists of two components: (1) income based incentive fee and (2) capital gains incentive fee. The income based incentive fees, net of waiver, were $9,279 and $18,747 for the three and six months ended June 30, 2025 and $9,903 and $20,028 for the three and six months ended June 30, 2024, respectively. In addition, the incentive fee waiver expired on January 24, 2025.
Current wording
The incentive fee consists of two components: (1) income based incentive fee and (2) capital gains incentive fee. The income based incentive fees, net of waiver, were $9,281 and $28,029 for the three and nine months ended September 30, 2025 and $8,448 and $28,476 for the three and nine months ended September 30, 2024, respectively. In addition, the incentive fee waiver expired on January 24, 2025.
Previous wording
For the three and six months ended June 30, 2025, net realized gains were $91 and $640, respectively. For the three months ended June 30, 2024, net realized gains on our investments were $108. For the six months ended June 30, 2024, net realized losses on our investments were $5,517, which was primarily due to the restructuring of three portfolio companies.
Current wording
For the three and nine months ended September 30, 2025, net realized gains were $26 and $666, respectively. For the three and nine months ended September 30, 2024, net realized losses were $10,965 and $16,482, respectively, which was primarily due to the restructuring of certain portfolio companies.
Previous wording
For the three months and six months ended June 30, 2025, net change in unrealized depreciation on our investments of $7,753 and $24,859, respectively, was primarily the result of the changes in spreads in the secondary markets as well as financial performance in certain portfolio companies. For the three and six months ended June 30, 2024, net change in unrealized appreciation on our investments of $2,816 and $5,474 was primarily driven by changes in spreads in the primary and secondary markets.
Current wording
For the three months and nine months ended September 30, 2025, net change in unrealized depreciation on our investments of $16,131 and $40,990, respectively, was primarily the result of the changes in spreads in the secondary markets as well as financial performance in certain portfolio companies. For the three and nine months ended September 30, 2024, net change in unrealized appreciation on our investments of $5,442 and $10,916 was primarily driven by changes in spreads in the primary and secondary markets.
Previous wording
We generate cash from the net proceeds of offerings of our Common Stock, net borrowings from our credit facilities, and net proceeds of our unsecured debt issuances and through cash flows from operations, including investment sales and repayments as well as income earned on investments. Details of our credit facilities and unsecured debt issuance are described in “—Debt” below. We may from time to time enter into new credit facilities, increase the size of existing credit facilities or issue additional debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
Current wording
We generate cash from the net proceeds of offerings of our Common Stock, net borrowings from our credit facilities, net proceeds of our unsecured debt issuances and debt securitizations and through cash flows from operations, including investment sales and repayments as well as income earned on investments. Details of our credit facilities, unsecured debt issuances and debt securitizations are described in “—Debt” below. We may, from time to time enter into new credit facilities, increase the size of existing credit facilities or issue additional debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
Previous wording
As of June 30, 2025, we had approximately $75.8 million of unrestricted cash, cash equivalents, and short term investments (including investments in money market funds), which taken together with our approximately $284.0 million and $829.0 million of availability under the BNP Funding Facility and the Truist Credit Facility (subject to borrowing base availability) (each as defined in Note 6. “Debt” in the notes to the accompanying consolidated financial statements), respectively, we expect to be sufficient for our investing activities and sufficient to conduct our operations in the near term. As of June 30, 2025, we believed we had adequate financial resources to satisfy unfunded portfolio company commitments of $549.1 million.
Current wording
As of September 30, 2025, we had approximately $71,703 of unrestricted cash, cash equivalents, and short term investments (including investments in money market funds), which taken together with our approximately $249,000 and $1,147,105 of availability under the BNP Funding Facility and the Truist Credit Facility (subject to borrowing base availability) (each as defined in Note 6. “Debt” in the notes to the accompanying consolidated financial statements), respectively, we expect to be sufficient for our investing activities and sufficient to conduct our operations in the near term. As of September 30, 2025, we believed we had adequate financial resources to satisfy unfunded portfolio company commitments of $519,349.
Previous wording
For the three and six months ended June 30, 2025 and June 30, 2024, there were no shares issued through ATM offerings.
Current wording
For the three and nine months ended September 30, 2025 and September 30, 2024, there were no shares issued through ATM offerings.
Previous wording
We adopted an “opt out” DRIP effective as of January 26, 2024 and later amended effective December 7, 2024. As a result, our stockholders who have not “opted out” of the DRIP will have their cash dividends or distributions automatically reinvested in additional shares of Common Stock, rather than receiving cash. Stockholders who receive distributions in the form of shares of Common Stock will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, those stockholders will not receive cash with which to pay any applicable taxes.
Current wording
We adopted an “opt out” DRIP effective as of January 26, 2024, which was later amended effective as of December 7, 2024. As a result, our stockholders who have not “opted out” of the DRIP will have their cash dividends or distributions automatically reinvested in additional shares of Common Stock, rather than receiving cash. Stockholders who receive distributions in the form of shares of Common Stock will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, those stockholders will not receive cash with which to pay any applicable taxes.
Previous wording
The following table summarizes our distributions declared and payable for the six months ended June 30, 2025 and June 30, 2024, respectively:
Current wording
The following table summarizes our distributions declared and payable for the nine months ended September 30, 2025 and September 30, 2024, respectively:
Previous wording
No shares were repurchased under our Original Company 10b5-1 Plan during the six months ended June 30, 2024.
Current wording
The following table summarizes the shares repurchased under our Original Company 10b5-1 Plan and Amended and Restated Company 10b5-1 Plan during the nine months ended September 30, 2025:
Previous wording
The following table summarizes the shares repurchased under our 10b5-1 Plan during the six months ended June 30, 2025:
Current wording
The following table summarizes the shares repurchased under our Original Company 10b5-1 Plan during the nine months ended September 30, 2024:
Previous wording
Our outstanding debt obligations were as follows:
Current wording
Our outstanding debt obligations were as follows (each as defined in Note 6. "Debt" in the notes to the accompanying consolidated financial statements):
Previous wording
(1)As of June 30, 2025 and December 31, 2024, a letter of credit of $7,775 and $1,828, respectively, was outstanding, which reduced the unused availability under the Truist Credit Facility by the same amount. Under the Truist Credit Facility, the Company may borrow in U.S. dollars or certain other permitted currencies. As of June 30, 2025 and December 31, 2024, the Company had borrowings denominated in Euros (EUR) of 3,298 and 3,298, respectively, Canadian dollars (CAD) of 3,300 and 300, respectively and Pound Sterling (GBP) of 1,020 and 1,020, respectively.
Current wording
As of September 30, 2025 and December 31, 2024, a letter of credit of $9,775 and $1,828, respectively, was outstanding, which reduced the unused availability under the Truist Credit Facility by the same amount. Under the Truist Credit Facility, the Company may borrow in U.S. dollars or certain other permitted currencies. As of September 30, 2025 and December 31, 2024, the Company had borrowings denominated in Euros (EUR) of 3,298 and 3,298, respectively, Canadian dollars (CAD) of 3,300 and 300, respectively and Pound Sterling (GBP) of 1,020 and 1,020, respectively.
Previous wording
(2)As of June 30, 2025, the carrying value of the Company’s 2027 Notes, 2025 Notes, 2029 Notes and 2030 Notes were presented net of unamortized debt issuance costs of $1,822, $0, $2,775 and $4,176 and unamortized original issuance discount of $346, $0, $3,013 and $3,664, respectively. As of December 31, 2024, the carrying value of the Company’s 2027 Notes, 2025 Notes, 2029 Notes and 2030 Notes were presented net of unamortized debt issuance costs of $2,374, $856 $3,297 and $0 and unamortized original issuance discount of $452, $0, $3,398 and $0, respectively.
Current wording
As of September 30, 2025, the carrying value of the Company’s 2027 Notes, 2025 Notes, 2029 Notes and 2030 Notes were presented net of unamortized debt issuance costs of $1,537, $0, $2,823 and $4,016 and unamortized original issuance discount of $292, $0, $2,817 and $3,475, respectively. As of December 31, 2024, the carrying value of the Company’s 2027 Notes, 2025 Notes, 2029 Notes and 2030 Notes were presented net of unamortized debt issuance costs of $2,374, $856, $3,297 and $0 and unamortized original issuance discount of $452, $0, $3,398 and $0, respectively.
Previous wording
(3)The 2025 Notes were redeemed on June 16, 2025.
Current wording
The 2025 Notes were redeemed on June 16, 2025.
Previous wording
We have entered into a number of business relationships with affiliated or related parties, including the following (which are defined
Current wording
We have entered into a number of business relationships with affiliated or related parties, including the following (which are defined in the notes to the accompanying consolidated financial statements if not defined herein):
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
4 Computed as (a) the annual stated spread, plus reference rate, as applicable, plus the annual accretion of discounts, as applicable on all investments of the Company divided by (b) total investments (at fair value or cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented herein.
Current report — wording carried from elsewhere
As of September 30, 2025 and December 31, 2024, the carrying value of the CLO 2025-1 Issued Debt was presented net of unamortized debt issuance costs of $2,804 and $0, respectively.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
in the notes to the accompanying consolidated financial statements if not defined herein):