Morgan Stanley Direct Lending Fund Q2 Earnings Call Highlights

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Sat, August 8, 2026 astatine 2:03 PM CDT 7 min read

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Second-quarter net covered the dividend: Net concern income fell to $0.45 per stock from $0.47, portion the committee maintained the $0.45 third-quarter distribution. Management said the payout remains accordant with normalized net power.
Credit marks reduced NAV but portfolio fundamentals remained broadly stable: NAV declined to $19.50 per share, and non-accruals accrued to 2.9% of investments astatine outgo aft 3 companies were added. However, astir 95% of the portfolio was risk-rated 2 oregon better, with improving revenue, EBITDA and interest-coverage metrics.
MSDL expanded financing capableness and its associated venture: The money issued $350 cardinal of five-year unsecured notes astatine a 6.10% coupon, repurchased $12.5 cardinal of shares beneath NAV, and invested an further $10 cardinal successful the Capstone JV, which supported astir $426 cardinal of commitments crossed 58 companies.

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Morgan Stanley Direct Lending Fund (NYSE:MSDL) reported second-quarter nett concern income of $38.2 million, oregon $0.45 per share, down from $0.47 per stock successful the anterior quarter, arsenic higher contributions from its Capstone associated task were offset by caller non-accruals and accrued financing costs.

The company's committee declared an unchanged regular third-quarter organisation of $0.45 per share, payable to shareholders of grounds arsenic of Sept. 30, 2026. Chief Executive Officer Michael Occi said second-quarter nett concern income covered the dividend and that absorption believes the existent payout is aligned with the fund's normalized net power.

Credit Marks Pressure NAV, While Portfolio Performance Remains Broadly Stable

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Net plus worth per stock ended the 4th astatine $19.50, compared with $19.81 successful the archetypal quarter. Chief Financial Officer David Pessah said the institution recorded $30.2 cardinal successful nett unrealized depreciation and realized losses during the period. Unrealized losses reflected underperformance astatine a fistful of portfolio companies, including investments placed connected non-accrual, portion realized losses were associated with 2 completed restructurings.

Non-accruals roseate to 2.9% of the portfolio astatine outgo arsenic of June 30, pursuing the placement of US Infra Services, Spectrio and BPG Holdings connected non-accrual status. Co-President Jeff Day said these companies had faced operational challenges implicit an extended play and that their show did not bespeak broader portfolio accent oregon sector-specific trends.

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