Morgan Stanley Direct Lending Fund Announces Proposed Initial Public Offering

Rhea-AI Summary

Morgan Stanley Direct Lending Fund (MSDL) has commenced an initial public offering of 5,000,000 shares of its common stock at an estimated price of $20.67 per share. The underwriters have the option to purchase up to an additional 750,000 shares. MSDL intends to use the net proceeds to repay a portion of its credit facilities, make investments, and for general corporate purposes.

Financial Analyst

The initial public offering (IPO) of Morgan Stanley Direct Lending Fund (MSDL) represents a significant capital market event, particularly for investors interested in the business development company (BDC) sector. The offering size of 5,000,000 shares, with an additional 750,000 shares to cover overallotments, indicates a substantial capital raise, which could impact MSDL's leverage and investment capacity.

Investors should note that the use of proceeds to repay credit facilities may improve MSDL's debt profile and potentially lower interest expenses. However, the effectiveness of this strategy depends on the interest rate differentials between the credit facilities and the cost of equity capital raised. The allocation towards new investments should be scrutinized for alignment with MSDL's historical investment performance and risk profile.

Given the list of prominent financial institutions acting as underwriters and managers, the offering is likely to attract significant attention. The proposed listing on the New York Stock Exchange enhances visibility and liquidity for the shares, which is typically valued by institutional investors.

Market Research Analyst

The BDC industry is characterized by its focus on lending to and investing in, small and mid-sized companies that may have limited access to traditional financing sources. MSDL's IPO could reflect a broader market trend towards alternative investment vehicles. The estimated offering price of $20.67 per share will be a critical point of reference for market participants assessing the company's valuation against its peers.

Market conditions at the time of the IPO will influence investor appetite and MSDL's performance will be compared to both BDC industry benchmarks and broader market indices. The timing and success of the IPO may also serve as a bellwether for other BDCs considering public offerings.

Legal Expert

From a regulatory standpoint, the effectiveness of the registration statement with the SEC is a mandatory step before any shares can be sold. This process involves a thorough review of MSDL's disclosures, including investment objectives, risks and financials. Potential investors must be aware that until the SEC declares the registration statement effective, no binding offers can be made or accepted.

The role of the underwriters and co-managers is also critical from a compliance perspective, as they are responsible for due diligence and ensuring the offering adheres to securities laws. The involvement of a significant number of co-managers may indicate a strategy to broaden the distribution network and enhance the offering's reach.

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley Direct Lending Fund (“MSDL”), a business development company externally managed by MS Capital Partners Adviser Inc., today announced that it has commenced an initial public offering of 5,000,000 shares of its common stock, par value $0.001 per share (the “Common Stock”). The estimated price for the offering is $20.67 per share of Common Stock. MSDL is expected to list its Common Stock on The New York Stock Exchange under the symbol “MSDL.” The underwriters are expected to have an option to purchase up to an additional 750,000 shares of Common Stock to cover overallotments, if any. The completion of the proposed offering depends upon several factors, including market and other conditions.

MSDL intends to use the net proceeds from this offering to repay a portion of the amounts outstanding under its credit facilities, to make investments in accordance with its investment objectives and strategies, and for other general corporate purposes.

Morgan Stanley, J.P. Morgan, and Wells Fargo Securities are acting as lead joint book-running managers for the offering. Keefe, Bruyette and Woods, A Stifel Company, Raymond James, RBC Capital Markets, and UBS Investment Bank are also acting as joint book-running managers for the offering. ING, JMP Securities, A Citizens Company, MUFG, SMBC Nikko, Academy Securities, Loop Capital Markets, R. Seelaus & Co., LLC, and Ramirez & Co., Inc. are acting as co-managers for the offering.

A registration statement relating to these securities was filed with the U.S. Securities and Exchange Commission (“SEC”) but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time that the registration statement becomes effective. No offer to buy the securities can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked by you without obligation or commitment of any kind, at any time prior to the time you receive notice of an acceptance of the offer given after the effective date.

Investors are advised to carefully consider the investment objectives, risks and charges and expenses of MSDL before investing. The preliminary prospectus, dated January 16, 2024, contains this and other information about MSDL and should be read carefully before investing. The information in the registration statement is not complete and may be changed.

This press release will not constitute an offer to sell or the solicitation of an offer to buy the securities described above nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to their registration or qualification under the securities laws of any such state or jurisdiction. Offers of these securities are made only by means of the prospectus. The SEC has not approved or disapproved these securities or passed upon the adequacy of the preliminary prospectus. Any representation to the contrary is a criminal offense.

The offering of these securities will be made only by means of a prospectus forming part of the registration statement, copies of which may be obtained, when available, from: Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at 866-803-9204 or by email at prospectus-eq_fi@jpmchase.com; and Wells Fargo Securities, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at 800-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com.

About Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund (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.

Forward Looking Statements

Statements included herein 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, including related changes in base interest rates and significant market volatility on MSDL’s business, MSDL’s portfolio companies, MSDL’s industry and the global economy. 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 SEC. MSDL undertakes no duty to update any forward-looking statements made herein.

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For investor relations inquiries, send an email to MSDL@morganstanley.com



For media inquiries, please contact:

Alyson Barnes

Phone: +1 212 762-0514

alyson.barnes@morganstanley.com

Source: Morgan Stanley Direct Lending Fund

FAQ

What is the estimated price for the offering of MSDL's common stock?

The estimated price for the offering is $20.67 per share of Common Stock.

What is the ticker symbol for Morgan Stanley Direct Lending Fund?

The ticker symbol for Morgan Stanley Direct Lending Fund is 'MSDL'.

What will MSDL use the net proceeds from the offering for?

MSDL intends to use the net proceeds from this offering to repay a portion of the amounts outstanding under its credit facilities, to make investments in accordance with its investment objectives and strategies, and for other general corporate purposes.