HG bonds: Morgan Stanley Direct Lending prints 2027 notes; terms

Morgan Stanley Direct Lending Fund, or MSDLF, today completed an upsized $425 million offering of 4.50% notes due Feb. 11, 2027, at T+275. The issue was originally marketed at $300 million.

MSDLF is a private business development company, or BDC, externally managed by MS Capital Partners Adviser Inc., an indirect wholly owned subsidiary of Morgan Stanley. MSDLF had $1.8 billion in investments at fair value as of Sept. 30, 2021, up from $637 million as of year-end 2020, according to Moody's.

The new issuance was assigned respective Baa3/BBB– ratings by Moody's and Fitch. The outlooks are stable on both sides.

Moody's gave the BDC first-time Baa3 ratings Feb. 3 and earlier today assigned the same grade to the new offering, under the expectation that proceeds will be used to repay outstanding secured indebtedness. "This issuance will incrementally benefit MSDLF's funding and liquidity position. Moody's expects the company to expand its borrowing relationships over time and build a more diversified funding profile," Moody's said earlier today.

Also on Feb. 3, Fitch assigned a BBB- rating to the company and the new offering. "Rating constraints include MSDLF's short operating history, elevated growth and above-average current leverage, although this is somewhat mitigated by the ability to draw on capital commitments," Fitch noted at the time.

Terms: