Morgan Stanley Direct Lending (NYSE: MSDL) details Q2 2026 earnings and dividend
Rhea-AI Filing Summary
Morgan Stanley Direct Lending Fund reported second-quarter 2026 net investment income of $38.2 million, or $0.45 per share, on total investment income of $88.8 million, compared with $89.1 million in the prior quarter. Net realized and unrealized losses of $30.2 million resulted in earnings per share of $0.09, compared with ($0.05) in the first quarter. Net asset value per share was $19.50 as of June 30, 2026, down from $19.81 on March 31.
The portfolio totaled approximately $3.6 billion at fair value across 229 portfolio companies, 93.1% in first-lien debt, with weighted average yields of 9.1% at amortized cost and 9.4% at fair value. Debt outstanding was $2.0 billion, reflecting a 1.21x debt-to-equity ratio, alongside $1,471.5 million of available credit capacity and $71.6 million of unrestricted cash. The company repurchased 831,486 shares at an average price of $15.06 and declared a third-quarter 2026 regular dividend of $0.45 per share, payable on or around October 23, 2026 to stockholders of record on September 30, 2026.
Positive
- None.
Negative
- None.
Filing Explained
MSDL agreed to contribute up to $200 million to Capstone JV; 52.3% of combined commitments had been called by June 30.
The filing discloses that MSDL and an institutional investor launched Capstone JV, with agreed contributions of up to
The filing also reports seven portfolio-company investments on non-accrual status, representing approximately
The Capstone JV capital-commitments line is the key follow-up: later disclosures would show whether additional amounts are called.
8-K Event Classification
Key Figures
Key Terms
net investment income financial
non-accrual status financial
business development company regulatory
payment-in-kind income financial
debt to equity financial
Capstone JV financial
Earnings Snapshot
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Morgan Stanley Direct Lending Fund (MSDL) Q2 2026 earnings and net investment income?
What dividend did MSDL declare for the third quarter of 2026 and when will it be paid?
What is the size and composition of MSDL’s investment portfolio as of June 30, 2026?
What were MSDL’s leverage and liquidity positions at the end of Q2 2026?
What is Capstone JV and how much capital has been called from MSDL?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
On August 6, 2026, Morgan Stanley Direct Lending Fund (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2026. The text of the press release is included as Exhibit 99.1 to this Form 8-K.
The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being “furnished” and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 7.01. | Regulation FD Disclosure. |
On August 4, 2026, the Board of Directors of the Company declared a regular distribution to stockholders in the amount of $0.45 per share. The distribution will be payable on or around October 23, 2026 to stockholders of record as of September 30, 2026.
The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being “furnished” and shall not be deemed “filed” by the Company for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits:
| Exhibit Number |
Description | |
| 99.1 | Press Release of Morgan Stanley Direct Lending Fund, dated August 6, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: August 6, 2026 | MORGAN STANLEY DIRECT LENDING FUND | |||||
| By: | /s/ David Pessah | |||||
| David Pessah | ||||||
| Chief Financial Officer | ||||||
Exhibit 99.1
Morgan Stanley Direct Lending Fund Announces June 30, 2026 Financial Results and Declares Third Quarter 2026 Regular Dividend of $0.45 per Share
NEW YORK, NY, August 6, 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 second quarter ended June 30, 2026.
QUARTERLY HIGHLIGHTS
| • | Net investment income of $38.2 million, or $0.45 per share, as compared to $40.5 million, or $0.47 per share, for the quarter ended March 31, 2026; |
| • | Net asset value of $19.50 per share, as compared to $19.81 as of March 31, 2026; |
| • | Debt-to-equity was 1.21x as of June 30, 2026, as compared to 1.22x as of March 31, 2026; |
| • | New investment commitments of $95.0 million (net of any syndications), fundings of $146.2 million and sales and repayments of $240.5 million, resulting in net funded deployment of ($94.2) million; |
| • | The Company continued to ramp Capstone Lending LLC (“Capstone JV”). As of June 30, 2026, approximately 52.3% of the total capital commitments were called; |
| • | The Company’s Board of Directors (the “Board”) declared a regular dividend of $0.45 per share to shareholders of record as of June 30, 2026; and |
| • | On April 23, 2026, the Company executed an amendment to the Truist Credit Facility, extending the termination date to April 2030 and the final maturity to April 2031. |
SELECTED FINANCIAL HIGHLIGHTS
| For the Quarter Ended | ||||||||
| ($ in thousands, except per share information) |
June 30, 2026 | March 31, 2026 | ||||||
| Net investment income per share |
$ | 0.45 | $ | 0.47 | ||||
| Net realized and unrealized gains (losses) per share1 |
($ | 0.36 | ) | ($ | 0.52 | ) | ||
| Earnings per share |
$ | 0.09 | ($ | 0.05 | ) | |||
| Regular dividend per share |
$ | 0.45 | $ | 0.45 | ||||
| 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) | June 30, 2026 | March 31, 2026 | ||||||
| Investments, at fair value |
$ | 3,554,287 | $ | 3,668,950 | ||||
| Total debt outstanding, at principal |
$ | 2,000,678 | $ | 2,064,010 | ||||
| Net assets |
$ | 1,647,868 | $ | 1,690,467 | ||||
| Net asset value per share |
$ | 19.50 | $ | 19.81 | ||||
| Debt to equity |
1.21x | 1.22x | ||||||
| Net debt to equity |
1.17x | 1.16x | ||||||
RESULTS OF OPERATIONS
Total investment income for the quarter ended June 30, 2026 was $88.8 million, compared to $89.1 million for the quarter ended March 31, 2026. The modest decrease was primarily driven by the impact of positions placed on non-accrual, and partially offset by the impact of the Capstone JV.
1
Total net expenses for the quarter ended June 30, 2026 were $49.8 million, up from $47.7 million for the quarter ended March 31, 2026. The increase was primarily driven by higher interest and other financing expenses as well as a net increase in incentive fees in the quarter.
Net investment income for the quarter ended June 30, 2026 was $38.2 million, or $0.45 per share, compared to $40.5 million, or $0.47 per share, for the quarter ended March 31, 2026.
For the quarter ended June 30, 2026, net change in unrealized depreciation was $22.8 million and net realized losses were $7.4 million.
PORTFOLIO AND INVESTMENT ACTIVITY
As of June 30, 2026, the Company’s investment portfolio had a fair value of approximately $3.6 billion, comprised of 229 portfolio companies across 36 industries, with an average investment size of $15.5 million, or 0.4% of our total portfolio on a fair value basis. The composition of the Company’s investments was the following:
| June 30, 2026 | March 31, 2026 | |||||||||||||||||||||||
| ($ in thousands) | Cost | Fair Value | % of Total Investments at Fair Value |
Cost | Fair Value | % of Total Investments at Fair Value |
||||||||||||||||||
| First Lien Debt |
$ | 3,414,546 | $ | 3,308,689 | 93.1 | % | $ | 3,520,313 | $ | 3,439,360 | 93.8 | % | ||||||||||||
| Second Lien Debt |
77,453 | 72,603 | 2.0 | 82,095 | 72,397 | 2.0 | ||||||||||||||||||
| Other Debt Investments |
8,830 | 7,149 | 0.2 | 8,546 | 7,593 | 0.2 | ||||||||||||||||||
| Equity |
71,278 | 63,302 | 1.8 | 62,937 | 56,528 | 1.5 | ||||||||||||||||||
| Investment in Joint Venture |
104,532 | 102,544 | 2.9 | 94,532 | 93,072 | 2.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | 3,676,639 | $ | 3,554,287 | 100.0 | % | $ | 3,768,423 | $ | 3,668,950 | 100.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment activity was as follows:
| Investment Activity: |
Three Months Ended June 30, 2026 |
Three Months Ended March 31, 2026 |
||||||
| New investment commitments, at par (net of syndications) |
$ | 94,988 | $ | 144,889 | ||||
| Investment fundings |
$ | 146,236 | $ | 173,964 | ||||
| Number of new investment commitments in portfolio companies |
3 | 7 | ||||||
| Number of portfolio companies exited or fully repaid |
1 | 7 | ||||||
Total weighted average yield of investments in debt securities at amortized cost and fair value was 9.1% and 9.4%, respectively, as of June 30, 2026, down from 9.3% and 9.5%, respectively, as of March 31, 2026. Floating rate debt investments as a percentage of total portfolio on a fair value basis was 99.6% as of June 30, 2026, unchanged compared to March 31, 2026. As of June 30, 2026, certain investments in seven portfolio companies were on non-accrual status, representing approximately 2.9% of total investments at amortized cost.
CAPITAL AND LIQUIDITY
As of June 30, 2026, the Company had total principal debt outstanding of $2,000.7 million, including $351.0 million outstanding in the Company’s BNP Funding Facility, $215.7 million outstanding in the 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.
2
The combined weighted average interest rate on debt outstanding was 5.40% for the quarter ended June 30, 2026. As of June 30, 2026, the Company had $1,471.5 million of availability under its credit facilities and $71.6 million in unrestricted cash and short-term, liquid investments. Debt to equity was 1.21x and 1.22x as of June 30, 2026 and March 31, 2026, respectively.
SHARE REPURCHASES
For the three months ended June 30, 2026, the Company repurchased 831,486 shares at an average price of $15.06 per share.
JOINT VENTURE
The Company launched Capstone JV, a joint venture with an institutional investor with a substantially similar investment strategy as the Company. The Company and its joint venture partner agreed to contribute up to $200.0 million and $50.0 million, respectively, to Capstone JV. As of June 30, 2026, approximately 52.3% of the total capital commitments were called.
OTHER DEVELOPMENTS
| • | On August 4, 2026, the Board declared a regular distribution of $0.45 per share, which is payable on or around October 23, 2026 to shareholders of record as of September 30, 2026. |
| • | Subsequent to quarter end, the Company successfully issued $350 million of 6.10% Notes due July 2031. |
CONFERENCE CALL INFORMATION
Morgan Stanley Direct Lending Fund will host a conference call on Friday, August 7, 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:
| • | Audio Webcast |
| • | Conference Call |
| • | Domestic: 800-330-6710 |
| • | International: 1-213-279-1505 |
| • | Passcode: 9670392 |
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.
3
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 |
Media Alyson Barnes 212-762-0514 alyson.barnes@morganstanley.com |
4
Consolidated Statements of Assets and Liabilities
(In thousands, except share and per share amounts)
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets |
||||||||
|
Non-controlled/non-affiliated investments, at fair value (amortized cost of $3,537,851 and $3,833,800) |
$ | 3,418,959 | $ | 3,766,757 | ||||
| Non-controlled/affiliated investments, at fair value (amortized cost of $34,256 and $5,239) |
32,784 | 4,789 | ||||||
| Controlled/affiliated investments, at fair value (amortized cost of $104,532 and $0) |
102,544 | — | ||||||
| Total investments, at fair value (cost of $3,676,639 and $3,839,039) |
3,554,287 | 3,771,546 | ||||||
| Cash and cash equivalents (restricted cash of $8,600 and $3,820) |
65,816 | 81,434 | ||||||
| Investments in unaffiliated money market fund (cost of $14,357 and $12,976) |
14,357 | 12,976 | ||||||
| Deferred financing costs |
18,914 | 16,874 | ||||||
| Interest and dividend receivable from non-controlled/non-affiliated investments |
23,670 | 26,332 | ||||||
| Interest receivable from non-controlled/affiliated investments |
146 | 89 | ||||||
| Dividend receivable from controlled/affiliated investments |
3,016 | — | ||||||
| Receivable for investments sold/repaid |
30,142 | 455 | ||||||
| Other assets |
391 | 10,390 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 3,710,739 | $ | 3,920,096 | ||||
|
|
|
|
|
|||||
| Liabilities |
||||||||
| Debt (net of unamortized debt issuance costs of $9,288 and $10,545) |
$ | 1,981,897 | $ | 2,086,672 | ||||
| Distributions payable |
38,103 | 43,222 | ||||||
| Management fees payable |
9,182 | 9,596 | ||||||
| Income based incentive fees payable |
6,518 | 7,281 | ||||||
| Interest payable |
18,776 | 20,945 | ||||||
| Payable for investment purchased |
11 | — | ||||||
| Payable to affiliates (Note 3) |
51 | 91 | ||||||
| Accrued expenses and other liabilities |
8,333 | 4,200 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
2,062,871 | 2,172,007 | ||||||
| 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; 84,504,322 and 86,276,305 shares issued and outstanding) |
85 | 86 | ||||||
| Paid-in capital in excess of par value |
1,740,413 | 1,767,623 | ||||||
| Distributable earnings (loss) |
(92,630 | ) | (19,620 | ) | ||||
| Total net assets |
$ | 1,647,868 | $ | 1,748,089 | ||||
|
|
|
|
|
|||||
| Total liabilities and net assets |
$ | 3,710,739 | $ | 3,920,096 | ||||
|
|
|
|
|
|||||
| Net asset value per share |
$ | 19.50 | $ | 20.26 | ||||
5
Consolidated Statements of Operations (Unaudited)
(In thousands, except share amounts)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Investment income: |
||||||||||||||||
| From non-controlled/non-affiliated investments: |
||||||||||||||||
| Interest income |
$ | 77,516 | $ | 93,752 | $ | 159,156 | $ | 188,693 | ||||||||
| Payment-in-kind income |
4,842 | 3,815 | 8,893 | 8,003 | ||||||||||||
| Dividend income |
1,742 | 650 | 2,674 | 1,244 | ||||||||||||
| Other income |
1,353 | 1,175 | 2,476 | 2,870 | ||||||||||||
| From non-controlled/affiliated investments: |
||||||||||||||||
| Interest income |
179 | 44 | 279 | 70 | ||||||||||||
| Payment-in-kind income |
88 | 72 | 141 | 86 | ||||||||||||
| Dividend income |
27 | — | 27 | — | ||||||||||||
| Other income |
11 | — | 11 | — | ||||||||||||
| From controlled/affiliated investments: |
||||||||||||||||
| Dividend income |
3,016 | — | 4,181 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investment income |
88,774 | 99,508 | 177,838 | 200,966 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Expenses: |
||||||||||||||||
| Interest and other financing expenses |
32,018 | 34,707 | 62,683 | 68,886 | ||||||||||||
| Management fees |
9,182 | 9,624 | 18,612 | 19,242 | ||||||||||||
| Income based incentive fees |
6,518 | 9,279 | 12,318 | 19,122 | ||||||||||||
| Professional fees |
1,716 | 1,698 | 3,190 | 3,306 | ||||||||||||
| Directors’ fees |
130 | 130 | 259 | 259 | ||||||||||||
| Administrative service fees |
61 | 85 | 122 | 145 | ||||||||||||
| General and other expenses |
189 | 128 | 350 | 310 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
49,814 | 55,651 | 97,534 | 111,270 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Management fees waiver (Note 3) |
— | — | — | (641 | ) | |||||||||||
| Incentive fees waiver (Note 3) |
— | — | — | (375 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net expenses |
49,814 | 55,651 | 97,534 | 110,254 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net investment income (loss) before taxes |
38,960 | 43,857 | 80,304 | 90,712 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Excise tax expense |
800 | 200 | 1,634 | 827 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net investment income (loss) after taxes |
38,160 | 43,657 | 78,670 | 89,885 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized and unrealized gain (loss): |
||||||||||||||||
| Net realized gain (loss) on non-controlled/non-affiliated investments |
(7,407 | ) | 25 | (20,580 | ) | 587 | ||||||||||
| Foreign currency and other transactions |
(24 | ) | 66 | (22 | ) | 53 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized gain (loss) |
(7,431 | ) | 91 | (20,602 | ) | 640 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated investments |
(21,915 | ) | (7,751 | ) | (51,621 | ) | (24,899 | ) | ||||||||
| Net change in unrealized appreciation (depreciation) on non-controlled/affiliated investments |
(351 | ) | (2 | ) | (1,023 | ) | 40 | |||||||||
| Net change in unrealized appreciation (depreciation) on controlled/affiliated investments |
(527 | ) | — | (1,987 | ) | — | ||||||||||
| Translation of assets and liabilities in foreign currencies |
(8 | ) | 101 | (19 | ) | 100 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net unrealized appreciation (depreciation) |
(22,801 | ) | (7,652 | ) | (54,650 | ) | (24,759 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized and unrealized gain (loss) |
(30,232 | ) | (7,561 | ) | (75,252 | ) | (24,119 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from operations |
$ | 7,928 | $ | 36,096 | $ | 3,418 | $ | 65,766 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings per share (basic and diluted) |
$ | 0.09 | $ | 0.41 | $ | 0.04 | $ | 0.75 | ||||||||
| Weighted average shares outstanding (basic and diluted) |
84,754,809 | 87,189,801 | 85,262,160 | 87,798,346 | ||||||||||||
6