NEW YORK - Morgan Stanley (NYSE:MS) Direct Lending Fund (NYSE:MSDL), managed by MS Capital Partners Adviser Inc., has priced its initial public offering at $20.67 per share, with trading set to commence on the New York Stock Exchange on January 24, 2024. The offering includes 5 million shares of common stock with an option for underwriters to purchase an additional 750,000 shares to cover any overallotments.
The fund anticipates using the proceeds from the IPO to reduce debt under its credit facilities, to fund investments aligned with its strategies, and for other general corporate purposes. The delivery of the shares is expected to occur around January 26, 2024, subject to standard closing conditions.
Morgan Stanley, J.P. Morgan, and Wells Fargo (NYSE:WFC) Securities are leading the offering as joint book-running managers. Other financial institutions, including Keefe, Bruyette and Woods, Raymond James, RBC Capital Markets, and UBS Investment Bank, are also participating as joint book-running managers. A cohort of co-managers, including ING, JMP Securities, MUFG, SMBC Nikko, and others, are supporting the offering.
Morgan Stanley Direct Lending Fund is a non-diversified specialty finance entity that focuses on lending to middle-market companies. As of September 30, 2023, the fund reported an investment portfolio valued at $3.1 billion and a net asset value of $1.5 billion.
MSDL operates as a business development company under the Investment Company Act of 1940 and is managed by an indirect, wholly owned subsidiary of Morgan Stanley, which oversees approximately $1.5 trillion in assets as of December 31, 2023.
InvestingPro Insights
As Morgan Stanley Direct Lending Fund (NYSE:MSDL) makes its debut on the stock market, investors may find value in the broader financial health and performance trends of its managing entity, Morgan Stanley (NYSE:MS). With a market capitalization of $141.06 billion and a Price/Earnings (P/E) ratio of 16.54, Morgan Stanley stands as a significant figure in the Capital Markets industry. The company's commitment to shareholder returns is evident in its history of maintaining dividend payments for 32 years and raising them for the past 10 years. This consistency is complemented by a strong return over the last three months, marked at 21.03%.
InvestingPro Tips indicate that Morgan Stanley has been profitable over the last twelve months, with analysts predicting the company will remain profitable this year. These insights, along with the company's gross profit margin of 86.47% for the last twelve months as of Q1 2023, may offer investors confidence in the firm's financial stability and performance.
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