Morgan Stanley Direct Lending Fund

Welcome to Morgan Stanley Direct Lending Fund's third quarter 2025 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 Santa Johnson. Please go ahead.

Good morning, and welcome to Morgan Stanley Direct Lending Fund's third quarter 2025 earnings call. I am joined this morning by Michael Osi, Chief Executive Officer, Ashwin Krishnan, Chief Investment Officer, Jeff Day, Co-President, David Pessa, Chief Financial Officer, and Rebecca Shaul, Head of Portfolio Management. Morgan Stanley Direct Lending Fund's third quarter 2025 financial results were released yesterday after market close and can be accessed on the investor relations section of our website at www.mscl.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 in 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 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 Michael Osi.

Thank you, Santa. Good morning, everyone. Thank you for joining us today for Morgan Stanley Direct Lending Fund's third quarter 2025 conference call. We'll walk through our third quarter results, provide an update on the portfolio, and share our outlook for the remainder of the year. I'll start with a few key highlights before turning it over to Jeff Day to discuss the deal environment. We generated solid performance in the third quarter as the deployment environment gathered momentum. We have witnessed a continued pickup in deal activity as the market has gained more visibility on the trajectory of interest rates and government policy. In terms of operating results, we generated net investment income of 50 cents per share in line with the 50 cents per share that we earned in the second quarter. Our earnings in the third quarter were once again of high quality. characterized by consistently low contributions from payment in kind and other income. During the quarter, MSDL committed $183 million to new investments, representing a 23 percent increase relative to the second quarter. Fundings were largely offset by repayments, with that organic portfolio churn constituting approximately 5 percent of the portfolio for the third consecutive quarter. The existing book provided a healthy contribution to overall funding activity. and nearly 75% of the non-refinancing volume during the quarter was driven by new platforms, underscoring the strength of our origination engine. Additionally, we continue to lead nearly all of our deal flow, including agenting the LBOs for F&G Suite Holdings, an incumbent borrower, and BCTO Bluebill, a new platform. We believe that the combination of our deep origination team and our ability to leverage the broader Morgan Stanley franchised continues to differentiate our business in the marketplace. Sponsors increasingly look to us as a value-add partner, one that is capable of delivering more than just capital. Our breadth and depth of relationships allows us to see a vast range of deal flow, and we can remain selective given that this opportunity set dwarfs the scale of our capital base. We believe that our selective approach enables us to stay true to our mission of principal preservation, as evidenced by our credit results. The Board declared a distribution of 50 cents per share for the fourth quarter, unchanged relative to prior quarters. Our dividend policy framework remains rooted in our pursuit to generate attractive and transparent risk-adjusted returns to shareholders. Even with the prospect of additional Fed cuts, we expect that gross asset yields will remain elevated in a historical context, as spreads have shown some evidence of bottoming. Away from interest income drivers, We have made strides in optimizing the right-hand side of the balance sheet, including through the closing of our inaugural CLO and the repricing of our asset-based facility with BNP. We closed both of these in the third quarter, and these steps will see their full earnings benefit in the quarters ahead. We will otherwise continue to evaluate structural opportunities to enhance return on NAV without deviating from our more defensive investment strategy. We believe that our transparent revenue model, efficient and conservative debt profile, relatively low operating expense base, and thoughtful fee structure highlight our strong alignment with shareholders. As emphasized last quarter, our platform benefits from Morgan Stanley's global resources and continued focus on MSDL as our platform's most visible pool of capital. The firm has continued to support the build-out of our team as part of the ongoing scaling of MSIM's credit business, we remain focused on generating long-term value for MSDL shareholders through the optimization of our defensive investment strategy and other return levers. With that, I will turn the call over to Jeff Day.