Morgan Stanley Direct Lending Fund Prices Initial Public Offering
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Insights
The initial public offering (IPO) of Morgan Stanley Direct Lending Fund (MSDL) represents a significant event for both the company and potential investors. Pricing the IPO at $20.67 per share for a total of 5,000,000 shares indicates a substantial capital raise for MSDL. The additional option for underwriters to purchase up to 750,000 shares to cover overallotments provides a cushion that may stabilize the stock price post-IPO. It's important to assess the valuation implied by the IPO price, which reflects the market's initial perception of MSDL's intrinsic value and future growth prospects.
Investors will be keen to understand the fund's investment strategy, historical performance and management team's track record. The performance of MSDL's stock after it begins trading will offer insights into investor confidence in the business development company (BDC) sector and particularly in MSDL's ability to generate returns. For the broader market, the success of this IPO could influence the sentiment towards future BDC offerings and the availability of capital for direct lending activities.
An IPO in the business development company space is indicative of the current appetite for alternative investment vehicles, especially in a low-interest-rate environment where investors are seeking higher yields. MSDL's entry into the public market may be seen as an opportunity to diversify portfolios with an asset class that traditionally provides a steady income stream through loan interest. The impact on the stock market will depend on the reception of MSDL's business model, which focuses on direct lending to middle-market companies—a segment that is often underserved by traditional banks.
Understanding the competitive landscape is crucial, as MSDL will be vying for market share against other established BDCs and lending platforms. The stock market will monitor how MSDL differentiates itself, perhaps through its underwriting standards, portfolio diversification, or yield performance. These factors will not only affect the stock's performance but also the perceived risk and stability of investing in BDCs as a whole.
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
Investors are advised to carefully consider the investment objectives, risks and charges and expenses of MSDL before investing. The preliminary prospectus 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 is being 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,
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. As of September 30, 2023, MSDL had an investment portfolio of
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240123934820/en/
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
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