Morgan Stanley Direct Lending Fund

Welcome to the Morgan Stanley Direct Lending Fund's third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks. As a reminder, this conference call is being recorded. At this time, I'd like to turn the call over to Michael Osi, Head of Investor Relations and Chief Administrative Officer. Please go ahead.

Good morning. And welcome to Morgan Stanley Direct Lending Fund's third quarter 2024 earnings call. Joining me this morning are Jeff Levin, President and Chief Executive Officer, David Pessa, Chief Financial Officer, and Rebecca Shaul, Head of Portfolio Management. Morgan Stanley Direct Lending Fund's third quarter 2024 financial results were released yesterday after market close and can be accessed on the investor relations section of our website at www.msdl.com. We have arranged for a replay of today's event that will be accessible from the Morgan Stanley Direct Lending Fund website. During this call, I want to remind you that we may make forward-looking statements based on current expectations. The statements on this call that are not purely historical are forward-looking statements. These forward-looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including and without limitation market conditions, uncertainty surrounding interest rates, changing economic conditions, and other factors we have identified in our filings with the SEC. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions can be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained on this call are made of, as of the date hereof, and we assume no obligation to update the forward-looking statements or subsequent events. To obtain copies of SEC-related filings, please visit our website. With that, I will now turn the call over to Jeff Levin.

Jeff Levin Thank you, Michael. Thank you for joining us today for Morgan Stanley Direct Lending's third quarter 2024 conference call. We are proud of the strong results that we generated during the quarter. I will first begin with an overview of our performance in the quarter before discussing our market outlook. Dave will then provide updates on our portfolio and comment on the financial results. Our team delivered portfolio growth and solid operating results for the third quarter, supported by strong credit performance. At $20.83, net asset value per share was unchanged quarter over quarter. We generated net investment income of 66 cents per share, an increase from the 63 cents per share of net investment income earned in the second quarter, comfortably in excess of the $0.50 per share regular dividend we declared for the quarter, combined with the $0.10 special dividend. Recall that the latter had been declared by the Board of Directors around the time of the IPO and was paid to shareholders of record as of August 5th, 2024. For the third quarter, new investment commitments totaled approximately $455 million in 37 portfolio companies. Net funded deployment for the quarter was $124 million, as compared with $210 million in the second quarter. During the quarter, MSDL's debt to NAV increased from 0.9 times to 0.99 times, which is effectively at the low end of our one to one and a quarter target leverage range. I'm proud to say that we accomplished that without stretching on credit. Our deployment activity in the quarter showcased once again our ability to leverage our unique origination engine to drive quality deal flow. During the third quarter, we led or co-led approximately 90% of the new borrowers added to MSDL's portfolio. We believe sponsors are drawn to the quality of our team and our ability to be a value-add partner, given the broader Morgan Stanley platform we are a part of. In our view, these deals continue to be favorable from a credit perspective and when you consider the leverage and loan-to-value profiles, among other attributes. That's a good segue to the market outlook. A resilient backdrop has defined the first nine months of 2024, marked by strong economic performance against a backdrop of a potential soft landing and anticipated policy easing. The Federal Reserve's 50 basis point rate cut in September spurred market optimism, followed more than a year of base rates in excess of 5%. While we believe that base rates will trend modestly lower, gross asset yields are likely to continue to remain elevated, offering attractive opportunities for us, particularly when risk adjusted. Credit performance has continued to be solid, which we believe is a reflection of the resilience of the middle market economy. Regarding deal activity, we view the capital market rebound as firmly on track, with sponsor M&A likely to accelerate into 2025, As we emerge from the U.S. election and gain more visibility on the direction for interest rates, we see a growing desire for private equity firms and other asset owners to transact due to LP dynamics and generally more conducive private and public financing markets. We expect that sponsors are increasingly likely to deploy capital, which we believe will create lending opportunities for us. As the market environment evolves, we believe MSDL's differentiation among direct lenders will continue to come into full focus. Since our IPO in January, we've highlighted the clear benefits of our ability to leverage the broader Morgan Stanley platform. Our breadth and depth of sponsor relationships allows us to see a vast range of deal flow, and that deal flow grossly exceeds our capital base, which breeds selectivity and flexibility. We think that this supply-demand imbalance will continue to serve as a key competitive advantage. We look forward to continuing to source and underwrite lending opportunities that offer strong risk-adjusted returns and in turn create value for MSDL shareholders. With that, I would like to hand the call over to David, who will provide details on Morgan Stanley Direct Lending Fund's portfolio, investment activity, and financial results.