MSDL 10-Q Quarterly Report June 30, 2022 | Alphaminr
Morgan Stanley Direct Lending Fund
ALPHAMINR

MSDL 10-Q Quarter ended June 30, 2022

Balance Sheet
Cash Flow
Income Statement
Debt
10-Q 1 msdlf10-q06302022.htm 10-Q Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________________________________________________________________________________
FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2022
OR
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 814-01332
Morgan Stanley Direct Lending Fund
(Exact name of registrant as specified in its charter)
 Delaware
 84-2009506
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1585 Broadway10036
New York, NY(Zip Code)
(Address of principal executive offices)
1 (212) 761-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s) Name of each exchange on which registered
NoneNone None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☐
Accelerated filer ☐
Non-accelerated filer  ☒
Smaller reporting company ☐
Emerging growth company ☒



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐  No ☒
As of August 9, 2022, there was no established public market for the registrant’s common stock.
As of August 9, 2022, the Registrant had 65,361,581 shares of common stock, $0.001 par value, outstanding.




MORGAN STANLEY DIRECT LENDING FUND
TABLE OF CONTENTS
Part I. Financial Information
Item 1.
Consolidated Statements of Assets and Liabilities as of June 30, 2022 (unaudited) and December 31, 2021
Consolidated Schedule of Investments as of June 30, 2022 (unaudited) and December 31, 2021
Item 2.
Item 3.
Item 4.
Part II. Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

SIGNATURES




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Morgan Stanley Direct Lending Fund
Results of Review of Interim Financial Information
We have reviewed the accompanying consolidated statements of assets and liabilities of Morgan Stanley Direct Lending Fund and subsidiaries (the "Company"), including the consolidated schedule of investments as of June 30, 2022, and the related consolidated statements of operations, changes in net assets for the three-month and six-month periods ended June 30, 2022, and 2021, and cash flows for the six-month periods ended June 30, 2022 and 2021, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of assets and liabilities of the Company including the consolidated schedule of investments as of December 31, 2021, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (not presented herein); and in our report dated March 18, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statements of assets and liabilities as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated statements of assets and liabilities from which it has been derived.
Basis for Review Results
This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

New York, NY
August 9, 2022


4
Morgan Stanley Direct Lending Fund
Consolidated Statements of Assets and Liabilities
(In thousands, except share and per share amounts)

June 30, 2022
(Unaudited)		December 31, 2021
(Audited)
Assets
Non-controlled/non-affiliated Investments, at fair value (amortized cost of $2,705,519 and $2,373,435 at June 30, 2022 and December 31, 2021, respectively)$2,681,979 $2,387,374 
Cash80,847 74,153 
Deferred financing costs9,560 11,587 
Interest and dividend receivable from non-controlled/non-affiliated investments13,888 11,740 
Subscription receivable56 7,850 
Receivable for investments sold/repaid397 301 
Prepaid expenses and other assets213 268 
Total assets2,786,940 2,493,273 
Liabilities
Debt (net of unamortized debt issuance costs of $5,117 and $0 at June 30, 2022 and December 31, 2021, respectively)1,476,744 1,249,850 
Payable for investment purchased14,597 — 
Payable to affiliates (Note 3)2,202 4,431 
Financing costs payable2,170 4,234 
Dividends payable28,704 29,691 
Management fees payable1,634 1,306 
Income based incentive fees payable5,879 5,886 
Capital gains based incentive fees payable— 2,773 
Interest payable10,835 3,281 
Accrued expenses and other liabilities3,291 3,234 
Total liabilities1,546,056 1,304,686 
Commitments and Contingencies (Note 7)
Net Assets
Common stock, par value $0.001 (100,000,000 shares authorized and 61,077,262 and 56,838,027 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively)61 57 
Paid-in capital in excess of par value1,262,114 1,172,748 
Net distributable earnings (accumulated losses)(21,291)15,782 
Total net assets$1,240,884 $1,188,587 
Total liabilities and net assets$2,786,940 $2,493,273 
Net asset value per share$20.32 $20.91 







The accompanying notes are an integral part of these unaudited consolidated financial statements
5
Morgan Stanley Direct Lending Fund
Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share amounts)
For the Three Months EndedFor the Six Months Ended
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Investment Income:
From non-controlled/non-affiliated investments:
Interest income$48,463 $22,784 $91,178 $37,740 
Payment-in-kind interest income277 190 549 378 
Dividend income232 122 541 122 
Other income1,022 3,318 2,030 5,519 
Total investment income49,994 26,414 94,298 43,759 
Expenses:
Interest expense and other financing expenses13,781 4,218 24,130 6,976 
Management fees6,536 2,804 12,718 4,771 
Income based incentive fees5,879 3,540 11,345 5,846 
Capital gains incentive fees(1,694)680 (2,441)1,492 
Professional fees776 549 1,400 1,041 
Organization and offering costs— 3 — 42 
Directors’ fees88 83 175 165 
Administrative service fees54 54 70 104 
General and other expenses67 488 477 727 
Total expenses25,487 12,419 47,874 21,164 
Expense support (Note 3)— 86 39 97 
Management fees waiver (Note 3)(4,902)(2,103)(9,539)(3,578)
Net expenses20,585 10,402 38,374 17,683 
Net investment income (loss) before taxes29,409 16,012 55,924 26,076 
Excise tax expense— — — 5 
Net investment income/(loss) after taxes29,409 16,012 55,924 26,071 
Realized and unrealized gain (loss) on investment transactions:
Realized gain (loss):
Non-controlled/non-affiliated investments465 (6)538 (6)
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments(33,137)3,892 (37,479)8,534 
Net realized and unrealized gain (loss)(32,672)3,886 (36,941)8,528 
Net increase (decrease) in net assets resulting from operations$(3,263)$19,898 $18,983 $34,599 
Per share information—basic and diluted
Net investment income (loss) per share:$0.50 $0.63 $0.96 $1.23 
Earnings per share:$(0.06)$0.78 $0.33 $1.63 
Weighted average shares outstanding (Note 9):59,227,774 25,409,035 58,170,368 21,205,672 
    



The accompanying notes are an integral part of these unaudited consolidated financial statements
6
Morgan Stanley Direct Lending Fund
Consolidated Statements of Changes in Net Assets (Unaudited)
(In thousands)
For the Three Months EndedFor the Six Months Ended
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Net assets at beginning of period$1,190,918 $390,213 $1,188,587 $301,620 
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)29,409 16,012 55,924 26,071 
Net realized gain (loss)465 (6)538 (6)
Net change in unrealized appreciation (depreciation)(33,137)3,892 (37,479)8,534 
Net increase (decrease) in net assets resulting from operations(3,263)19,898 18,983 34,599 
Capital transactions:
Issuance of common stock74,866 194,970 74,866 274,970 
Reinvestment of dividends6,964 2,276 14,504 4,738 
Dividends declared(28,601)(13,974)(56,056)(22,544)
Net increase (decrease) in net assets resulting from capital transactions53,229 183,272 33,314 257,164 
Total increase (decrease) in net assets49,966 203,170 52,297 291,763 
Net assets at end of period$1,240,884 $593,383 $1,240,884 $593,383 

















The accompanying notes are an integral part of these unaudited consolidated financial statements
7
Morgan Stanley Direct Lending Fund
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
For the Six Months Ended
June 30, 2022June 30, 2021
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations$18,983 $34,599 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized (appreciation) depreciation on investments37,479 (8,534)
Net realized (gain) loss on investments(538)6 
Net accretion of discount and amortization of premium on investments(5,307)(4,348)
Payment-in-kind interest and dividend capitalized
(1,171)(503)
Amortization of deferred financing costs2,001 1,169 
Amortization of debt issuance costs and original issue discount on 2027 notes507 — 
Amortization of deferred offering costs— 24 
Purchases of investments and change in payable for investments purchased(555,727)(823,136)
Proceeds from sale of investments and principal repayments and change in receivable for investments sold245,160 170,587 
Changes in operating assets and liabilities:
(Increase) decrease in interest receivable from non-controlled/non-affiliated investments
(2,148)(4,345)
(Increase) decrease in prepaid expenses and other assets55 113 
(Decrease) increase in payable to affiliates(2,229)633 
(Decrease) increase in management fees payable328 406 
(Decrease) increase in incentive fees payable(2,780)3,108 
(Decrease) increase in interest payable7,554 1,027 
(Decrease) increase in accrued expenses and other liabilities57 429 
Net cash provided by (used in) operating activities(257,776)(628,765)
Cash flows from financing activities:
Borrowings on debt888,929 604,000 
Repayments on debt(657,000)(218,000)
Deferred financing costs paid(2,448)(2,284)
Debt issuance costs paid(5,132)— 
Dividends paid in cash(42,539)(12,997)
Proceeds from issuance of common stock82,660 274,970 
Offering costs paid— (6)
Net cash provided by (used in) financing activities264,470 645,683 
Net increase (decrease) in cash6,694 16,918 
Cash, beginning of period74,153 11,263 
Cash, end of period$80,847 $28,181 
Supplemental information and non-cash activities:
Excise tax paid$57 $5 
Interest expense paid$12,676 $4,696 
Reinvestment of dividend distributions during the period$14,504 $4,738 
Subscriptions receivable$56 $— 
Accrued but unpaid dividends$28,704 $13,974 
Accrued but unpaid deferred financing costs $— $1,089 
Accrued but unpaid debt issuance costs$410 $— 





The accompanying notes are an integral part of these unaudited consolidated financial statements
8
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
First Lien Debt
Aerospace and Defense
Jonathan Acquisition Company(5) (7)L + 5.00%7.25%12/22/20262,725 $2,662 $2,685 0.22 %
PCX Holding Corp.(5) (6) (7)L + 6.25%8.50%04/22/202718,325 18,172 17,866 1.44 
PCX Holding Corp.(5) (7) (15)L + 6.25%8.50%04/22/20279,195 8,992 8,734 0.70 
PCX Holding Corp.(5) (7) (15)L + 6.25%8.50%04/22/2027247 232 201 0.02 
Two Six Labs, LLC(5) (8)L + 5.50%6.25%08/20/202711,014 10,820 10,753 0.87 
Two Six Labs, LLC(5) (8) (15)L + 5.50%6.25%08/20/20272,129 2,072 2,028 0.16 
Two Six Labs, LLC(5) (8) (15)L + 5.50%6.25%08/20/2027— (37)(51)(0.00)
42,913 42,216 3.40 
Air Freight & Logistics
Omni Intermediate Holdings, LLC(5) (7) (10)L + 5.00%7.10%12/30/202612,198 12,078 11,954 0.96 
Omni Intermediate Holdings, LLC(5) (7) (10) (15)L + 5.00%7.10%12/30/2026532 516 501 0.04 
Omni Intermediate Holdings, LLC(5) (7) (15)L + 5.00%7.10%12/30/2025— (11)(21)(0.00)
12,583 12,434 1.00 
Auto Components
CC SAG Holdings Corp. (Spectrum Automotive)(5) (6) (8)L + 5.75%8.00%06/29/202823,770 23,455 22,613 1.82 
CC SAG Holdings Corp. (Spectrum Automotive)(5) (8) (15)L + 5.75%8.00%06/29/20283,311 3,246 2,990 0.24 
CC SAG Holdings Corp. (Spectrum Automotive)(5) (8) (15)L + 5.75%8.00%06/29/2027— (11)(43)(0.00)
Continental Battery Company(5) (7)L + 6.75%9.00%01/20/20276,219 6,103 5,971 0.48 
Sonny’s Enterprises, Inc.(5) (6) (7)L + 5.50%7.96%08/05/202619,762 19,457 18,995 1.53 
Sonny’s Enterprises, Inc.(5) (6) (7)L + 5.50%7.96%08/05/20267,040 6,916 6,766 0.55 
Sonny’s Enterprises, Inc.(5) (7) (15)L + 5.50%7.96%08/05/2026— (365)(824)(0.07)
58,801 56,468 4.55 
Automobiles
ARI Network Services, Inc.(5) (6)S + 5.50%6.88%02/28/202520,823 20,510 20,359 1.64 
ARI Network Services, Inc.(5) (6)S + 5.50%6.88%02/28/20253,649 3,594 3,567 0.29 
ARI Network Services, Inc.(5) (15)S + 5.50%6.88%02/28/2025424 380 357 0.03 
Summit Buyer, LLC(5) (7)L + 5.25%8.13%01/14/202622,232 21,860 21,465 1.73 
Summit Buyer, LLC(5) (7) (15)L + 5.25%8.13%01/14/202621,112 20,676 19,993 1.61 
Summit Buyer, LLC(5) (7) (15)L + 5.25%8.13%01/14/2026— (38)(84)(0.01)
9
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Turbo Buyer, Inc.(5) (7)L + 6.00%8.88%12/02/202538,133 $37,531 $36,909 2.97 %
Turbo Buyer, Inc.(5) (7)L + 6.00%8.88%12/02/202538,316 37,590 37,086 2.99 
142,103 139,652 11.25 
Biotechnology
GraphPad Software, LLC(5) (6) (7)L + 5.50%7.04%04/27/202715,035 14,907 14,532 1.17 
GraphPad Software, LLC(5) (7) (15)L + 5.50%7.04%04/27/2027— (14)(58)(0.00)
14,893 14,474 1.17 
Chemicals
Tank Holding Corp.(5) (6) (8)S + 6.00%7.63%03/31/202814,200 13,925 13,925 1.12 
Tank Holding Corp.(5) (8) (15)S + 6.00%7.63%03/31/2028333 318 318 0.03 
V Global Holdings, LLC(5) (6) (8)L + 5.75%6.91%12/22/20274,928 4,832 4,832 0.39 
V Global Holdings, LLC(5) (8) (15)L + 5.75%6.91%12/22/2025101 87 87 0.01 
19,162 19,162 1.54 
Commercial Services & Supplies
365 Retail Markets, LLC(5) (7)L + 4.75%5.75%12/23/202617,368 17,106 17,153 1.38 
365 Retail Markets, LLC(5) (7)L + 4.75%7.00%12/23/20265,557 5,527 5,488 0.44 
365 Retail Markets, LLC(5) (7) (15)L + 4.75%6.85%12/23/2026250 209 215 0.02 
Encore Holdings, LLC(5) (8)L + 4.50%6.73%11/23/20281,859 1,829 1,818 0.15 
Encore Holdings, LLC(5) (8) (15)L + 4.50%6.73%11/23/20281,106 1,068 1,027 0.08 
Encore Holdings, LLC(5) (8) (15)L + 4.50%6.73%11/23/2027— (9)(12)(0.00)
FLS Holding, Inc.(5) (7) (11)L + 5.25%7.28%12/17/202820,727 20,338 20,310 1.64 
FLS Holding, Inc.(5) (7) (11) (15)L + 5.25%7.28%12/17/2028— (42)(91)(0.01)
FLS Holding, Inc.(5) (7) (11) (15)L + 5.25%7.28%12/17/2027— (33)(36)(0.00)
KWOR Acquisition, Inc.(5) (8)L + 5.25%6.99%12/22/20285,401 5,298 5,293 0.43 
KWOR Acquisition, Inc.(5) (8) (15)L + 5.25%6.99%12/22/2028— (48)(95)(0.01)
KWOR Acquisition, Inc.(5) (8) (15)P + 4.25%9.00%12/22/202716 15 14 0.00 
MHE Intermediate Holdings, LLC(5) (6) (7)L + 6.00%7.29%07/21/202728,534 28,038 28,038 2.26 
MHE Intermediate Holdings, LLC(5) (7)L + 6.00%7.29%07/21/20273,730 3,663 3,663 0.30 
MHE Intermediate Holdings, LLC(5) (7) (15)L + 6.00%7.29%07/21/2027— (42)(42)(0.00)
PDFTron US Acquisition Corp.(5) (6) (7) (11)L + 5.50%7.00%07/15/202730,569 30,112 29,508 2.38 
10
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
PDFTron US Acquisition Corp.(5) (7) (11)L + 5.50%7.00%07/15/20279,800 $9,623 $9,460 0.76 %
PDFTron US Acquisition Corp.(5) (7) (11)L + 5.50%7.00%07/15/20267,700 7,576 7,433 0.60 
Pritchard Industries, LLC(5) (8)L + 5.50%7.75%10/13/202725,661 25,199 24,442 1.97 
Pritchard Industries, LLC(5) (8) (15)L + 5.50%7.75%10/13/20272,083 2,009 1,792 0.14 
Procure Acquireco, Inc. (Procure Analytics)(5) (8)L + 5.50%8.25%12/20/20283,948 3,874 3,816 0.31 
Procure Acquireco, Inc. (Procure Analytics)(5) (8) (15)L + 5.50%8.25%12/01/2028— (7)(27)(0.00)
Procure Acquireco, Inc. (Procure Analytics)(5) (8) (15)L + 5.50%8.25%12/01/2026— (4)(8)(0.00)
QW Holding Corporation(5) (6) (7)L + 5.75%7.04%08/31/20248,954 8,829 8,829 0.71 
QW Holding Corporation(5) (7) (15)L + 5.75%7.04%08/31/20241,024 1,001 1,001 0.08 
QW Holding Corporation(5) (7) (15)L + 5.75%7.04%08/31/2024— (31)(31)(0.00)
Sherlock Buyer Corp.(5) (8)L + 5.75%6.74%12/08/202811,117 10,909 10,878 0.88 
Sherlock Buyer Corp.(5) (8) (15)L + 5.75%6.74%12/08/2028— (30)(69)(0.01)
Sherlock Buyer Corp.(5) (8) (15)L + 5.75%6.74%12/08/2027— (23)(28)(0.00)
Sweep Purchaser, LLC(5) (7)L + 5.75%8.00%11/30/20268,749 8,613 8,613 0.69 
Sweep Purchaser, LLC(5) (7) (15)L + 5.75%7.16%11/30/20265,164 5,070 5,071 0.41 
Sweep Purchaser, LLC(5) (7) (15)P + 4.75%9.50%11/30/2026473 452 452 0.04 
Tamarack Intermediate, LLC(5)S + 5.75%6.94%03/13/20285,500 5,394 5,244 0.42 
Tamarack Intermediate, LLC(5) (15)S + 5.75%6.94%03/13/2028— (17)(42)(0.00)
United Flow Technologies Intermediate Holdco II, LLC(5) (7)L + 5.75%6.99%10/29/202717,057 16,748 16,520 1.33 
United Flow Technologies Intermediate Holdco II, LLC(5) (7) (15)L + 5.75%6.99%10/29/20278,627 8,455 8,316 0.67 
United Flow Technologies Intermediate Holdco II, LLC(5) (7) (15)L + 5.75%6.99%10/29/2026— (52)(95)(0.01)
US Infra Svcs Buyer, LLC(5) (6) (7)L + 6.50%8.32%04/13/202616,905 16,675 15,492 1.25 
US Infra Svcs Buyer, LLC(5) (7)L + 6.50%8.32%04/13/20262,385 2,355 2,186 0.18 
US Infra Svcs Buyer, LLC(5) (7)L + 6.50%8.32%04/13/20262,250 2,222 2,062 0.17 
Valcourt Holdings II, LLC(5) (6) (7)S + 5.50%7.75%01/07/202735,253 34,692 35,059 2.83 
Valcourt Holdings II, LLC(5) (7) (15)S + 5.50%7.75%01/07/20274,988 4,882 4,950 0.40 
VRC Companies, LLC(5) (6) (8)L + 5.50%8.38%06/29/202749,088 48,452 47,050 3.79 
VRC Companies, LLC(5) (6) (8) (15)L + 5.50%8.38%06/29/20274,267 4,162 3,924 0.32 
VRC Companies, LLC(5) (15)P + 4.50%8.38%06/29/2027413 392 345 0.03 
340,449 334,886 26.99 
11
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Construction & Engineering
KPSKY Acquisition, Inc.(5) (8)L + 5.50%7.14%10/19/202834,384 $33,752 $33,696 2.72 %
KPSKY Acquisition, Inc.(5) (15)P + 4.50%9.25%10/19/20283,707 3,597 3,550 0.29 
37,349 37,246 3.00 
Containers & Packaging
BP Purchaser, LLC(5) (8)L + 5.50%7.19%12/11/202817,423 17,097 16,439 1.32 
Fortis Solutions Group, LLC(5) (8)L + 5.50%7.75%10/13/202819,320 18,965 18,965 1.53 
Fortis Solutions Group, LLC(5) (8) (15)L + 5.50%7.75%10/13/20285,307 5,177 5,177 0.42 
Fortis Solutions Group, LLC(5) (8) (10) (15)L + 5.50%7.75%10/13/2028— (15)(15)(0.00)
Fortis Solutions Group, LLC(5) (8) (15)L + 5.50%7.75%10/15/2027180 132 132 0.01 
41,356 40,698 3.28 
Distributors
48Forty Solutions, LLC(5) (6) (7)S + 6.00%7.22%11/30/202615,575 15,275 15,275 1.23 
48Forty Solutions, LLC(5) (7) (15)S + 6.00%7.22%11/30/2026— (6)(6)(0.00)
48Forty Solutions, LLC(5) (7) (15)S + 6.00%7.22%11/30/2026— (52)(52)(0.00)
ABB Concise Optical Group, LLC(5) (8)L + 7.50%8.26%02/23/202818,068 17,637 17,405 1.40 
ABB Concise Optical Group, LLC(5) (15)P + 6.50%11.25%02/23/20281,642 1,597 1,572 0.13 
PT Intermediate Holdings III, LLC(5) (8)L + 5.50%7.75%11/01/202828,776 28,510 28,346 2.28 
PT Intermediate Holdings III, LLC(5) (8)L + 5.50%7.75%11/01/202816,010 15,858 15,770 1.27 
78,819 78,310 6.31 
Diversified Consumer Services
Heartland Home Services(5) (8) (15)L + 5.75%7.37%12/15/20261,192 1,180 1,091 0.09 
Lightspeed Solution, LLC(5)S + 6.00%7.53%03/01/20287,561 7,417 7,271 0.59 
Lightspeed Solution, LLC(5) (15)S + 6.00%7.53%03/01/2028— (23)(93)(0.01)
LUV Car Wash Group, LLC(5) (7) (15)L + 5.50%6.50%12/09/2026646 637 622 0.05 
Mammoth Holdings, LLC(5) (6) (7)L + 6.00%7.00%10/16/20238,058 8,016 7,987 0.64 
Mammoth Holdings, LLC(5) (7)L + 6.00%7.00%10/16/202336,151 35,955 35,829 2.89 
Mammoth Holdings, LLC(5) (7) (15)L + 6.00%7.00%10/16/2023— (5)(9)(0.00)
53,177 — 52,698 4.25 
Diversified Financial Services
12
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Everest Intermediate, Ltd(5) (11) (15)S + 5.75%7.75%05/25/2028— $(9)$(9)— %
Everest Intermediate, Ltd(5) (8) (11)S + 5.75%7.75%05/25/20293,042 2,982 2,982 0.24 
SitusAMC Holdings Corporation(5) (8)L + 5.75%8.00%12/22/20273,591 3,558 3,455 0.28 
Smarsh, Inc.(5)S + 6.50%7.25%02/16/20294,286 4,203 4,176 0.34 
Smarsh, Inc.(5) (15)S + 6.50%7.25%02/16/2029— (5)(7)(0.00)
Smarsh, Inc.(5) (15)S + 6.50%7.25%02/16/2029— (10)(28)(0.00)
10,719 10,569 0.85 
Food Products
AMCP Pet Holdings, Inc. (Brightpet)(5) (6) (7)L + 6.25%8.50%10/05/202633,655 32,877 32,927 2.65 
AMCP Pet Holdings, Inc. (Brightpet)(5) (7) (15)L + 6.25%8.50%10/05/20265,687 5,560 5,562 0.45 
Nellson Nutraceutical, Inc.(5) (6)L + 5.25%7.94%12/23/202324,541 24,304 24,386 1.97 
Teasdale Foods, Inc. (Teasdale Latin Foods)(5)L + 6.25%; 1.00% PIK9.88%12/18/202510,757 10,600 8,873 0.72 
73,341 71,748 5.78 
Health Care Equipment & Supplies
Performance Health Holdings, Inc.(5) (6) (7)L + 6.00%8.88%07/12/20279,398 9,235 9,125 0.74 
Health Care Providers & Services
Bearcat Buyer, Inc.(5) (6) (7)L + 4.75%7.00%07/09/20266,808 6,680 6,686 0.54 
Bearcat Buyer, Inc.(5) (7) (15)L + 4.75%7.00%07/09/20266,230 6,105 6,109 0.49 
DCA Investment Holdings, LLC(5) (6)S + 6.00%6.75%04/03/202811,114 10,978 11,008 0.89 
DCA Investment Holdings, LLC(5) (15)S + 6.00%6.75%04/03/20281,939 1,896 1,913 0.15 
Gateway US Holdings, Inc.(5) (8) (11)S + 5.50%8.23%09/22/2024754 747 747 0.06 
Gateway US Holdings, Inc.(5) (8) (11) (15)S + 5.50%8.23%09/22/202441 39 39 0.00 
Gateway US Holdings, Inc.(5) (8) (11) (15)S + 5.50%8.23%09/22/20242 1 1 0.00 
Heartland Veterinary Partners, LLC(5)L + 4.75%6.19%12/10/20261,875 1,859 1,841 0.15 
Heartland Veterinary Partners, LLC(5) (15)L + 4.75%6.19%12/10/20261,138 1,101 1,060 0.09 
Heartland Veterinary Partners, LLC(5) (15)L + 4.75%6.19%12/10/2026— (3)(7)(0.00)
mPulse Mobile, Inc.(5) (8)L + 5.25%7.28%12/17/202717,500 17,176 16,968 1.37 
mPulse Mobile, Inc.(5) (8) (15)L + 5.25%7.28%12/17/2027— (18)(61)(0.00)
mPulse Mobile, Inc.(5) (8) (15)L + 5.25%7.28%12/17/2027— (9)(15)(0.00)
Promptcare Infusion Buyer, Inc.(5) (7)L + 6.00%7.12%09/01/20279,119 8,957 8,784 0.71 
13
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Promptcare Infusion Buyer, Inc.(5) (7) (15)L + 6.00%7.12%09/01/2027886 $845 $743 0.06 %
Southern Veterinary Partners, LLC(5) (10)S + 5.50%7.70%06/28/2027904 886 886 0.07 
Stepping Stones Healthcare Services, LLC(5) (8)L + 5.75%8.00%01/02/20294,364 4,302 4,181 0.34 
Stepping Stones Healthcare Services, LLC(5) (8) (15)L + 5.75%8.00%01/02/2029— (6)(52)(0.00)
Stepping Stones Healthcare Services, LLC(5) (8) (15)L + 5.75%8.00%12/30/2026— (8)(26)(0.00)
Suveto Buyer, LLC(5) (8) (15)L + 5.00%7.25%09/09/202711,077 10,964 10,673 0.86 
Suveto Buyer, LLC(5) (15)P + 4.00%7.25%09/09/2027356 337 324 0.03 
Tivity Health, Inc.(5) (8)S + 6.00%8.01%06/28/20293,720 3,664 3,664 0.30 
Vardiman Black Holdings, LLC(5)S + 8.00%8.78%03/18/20273,429 3,396 3,258 0.26 
Vardiman Black Holdings, LLC(5) (15)S + 8.00%8.78%03/18/20271,465 1,438 1,262 0.10 
Vermont Aus Pty Ltd(5) (8) (10) (11)S + 5.50%7.55%03/23/20288,488 8,280 8,280 0.67 
89,607 88,266 7.11 
Health Care Technology
Lightspeed Buyer, Inc.(5) (6) (7)L + 5.75%7.14%02/03/202612,733 12,474 12,422 1.00 
Lightspeed Buyer, Inc.(5) (7) (15)L + 5.75%7.14%02/03/20269,281 9,040 8,956 0.72 
21,514 21,378 1.72 
Industrial Conglomerates
Electrical Source Holdings LLC(5) (6) (7)L + 5.50%6.51%11/25/202529,400 29,207 29,071 2.34 
Electrical Source Holdings LLC(5) (6) (7)L + 5.50%6.51%11/25/20256,505 6,405 6,432 0.52 
Electrical Source Holdings LLC(5) (7) (15)L + 5.50%6.51%11/25/2025175 159 163 0.01 
35,771 35,666 2.87 
Insurance Services
Foundation Risk Partners, Corp.(5) (8)L + 5.50%7.75%10/29/202843,182 42,585 42,552 3.43 
Foundation Risk Partners, Corp.(5) (8)L + 5.50%7.75%10/29/20289,392 9,261 9,255 0.75 
Foundation Risk Partners, Corp.(5) (8) (15)L + 5.50%7.75%10/29/2027— (61)(67)(0.01)
Galway Borrower, LLC(5) (8)L + 5.25%7.50%09/29/202828,422 27,922 27,922 2.25 
Galway Borrower, LLC(5) (8) (15)L + 5.25%7.50%09/29/2028599 532 524 0.04 
Galway Borrower, LLC(5) (8) (15)L + 5.25%6.22%09/30/2027677 641 641 0.05 
Higginbotham Insurance Agency, Inc.(5) (6) (8)L + 5.50%7.17%11/25/202618,575 18,358 18,256 1.47 
High Street Buyer, Inc.(5) (6) (8)L + 6.00%7.67%04/14/202810,043 9,870 9,991 0.81 
14
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
High Street Buyer, Inc.(5) (6) (8)L + 6.00%7.67%04/14/202840,328 $39,611 $40,122 3.23 %
High Street Buyer, Inc.(5) (8) (15)L + 6.00%7.67%04/16/2027— (34)(11)(0.00)
Integrity Marketing Acquisition, LLC(5) (6) (8)L + 5.50%7.38%08/27/202586,386 85,471 84,673 6.82 
Keystone Agency Investors(5) (7)S + 6.00%8.20%05/03/20273,093 3,049 3,047 0.25 
Keystone Agency Investors(5) (7) (15)S + 6.00%8.20%05/03/20272,578 2,515 2,511 0.20 
Majesco(5) (6) (7)L + 7.25%9.51%09/21/202723,540 23,026 23,213 1.87 
Majesco(5) (7) (15)L + 7.25%9.51%09/21/2026— (33)(22)(0.00)
Oakbridge Insurance Agency LLC(5) (7)S + 5.75%7.95%12/31/2026165 163 159 0.01 
Oakbridge Insurance Agency LLC(5) (7) (15)S + 5.75%7.95%12/31/202657 46 4 0.00 
Oakbridge Insurance Agency LLC(5) (7) (15)S + 5.75%7.95%12/31/202611 10 9 0.00 
Patriot Growth Insurance Services, LLC(5) (6)L + 5.25%7.08%10/16/202854,325 53,394 52,457 4.23 
Patriot Growth Insurance Services, LLC(5) (15)L + 5.25%7.08%10/16/2028— (150)(309)(0.02)
Patriot Growth Insurance Services, LLC(5) (15)L + 5.25%7.08%10/16/2028— (81)(154)(0.01)
Peter C. Foy & Associates Insurance Services, LLC(5) (8)L + 6.00%7.79%11/01/202818,796 18,618 18,517 1.49 
Peter C. Foy & Associates Insurance Services, LLC(5) (8) (15)L + 6.00%7.79%11/01/20284,967 4,904 4,859 0.39 
Peter C. Foy & Associates Insurance Services, LLC(5) (8) (15)L + 6.00%7.79%11/01/2027— (7)(12)(0.00)
RSC Acquisition, Inc.(5) (6) (7) (8)L + 5.50%6.95%10/30/202624,937 24,537 24,693 1.99 
RSC Acquisition, Inc.(5) (8) (15)L + 5.50%6.25%10/30/20263,463 3,394 3,385 0.27 
World Insurance Associates, LLC(5) (6) (7)L + 5.75%7.80%04/01/202633,495 32,548 32,824 2.65 
World Insurance Associates, LLC(5) (6) (7)L + 5.75%7.80%04/01/202631,328 30,599 30,701 2.47 
World Insurance Associates, LLC(5) (7) (15)L + 5.75%7.80%04/01/2026507 488 482 0.04 
431,176 430,222 34.67 
Interactive Media & Services
FMG Suite Holdings, LLC(5) (7)L + 5.50%6.25%10/30/202622,194 21,832 21,708 1.75 
FMG Suite Holdings, LLC(5) (7) (15)L + 5.50%6.25%10/30/2026— (83)(115)(0.01)
FMG Suite Holdings, LLC(5) (7) (15)L + 5.50%6.25%10/30/2026— (41)(57)(0.00)
MSM Acquisitions, Inc.(5) (6) (7)L + 6.00%7.67%12/09/202631,730 31,296 30,997 2.50 
MSM Acquisitions, Inc.(5) (7) (15)L + 6.00%7.67%12/09/202612,800 12,520 11,963 0.96 
MSM Acquisitions, Inc.(5) (15)L + 6.00%7.67%12/09/20261,243 1,185 1,152 0.09 
Triple Lift, Inc.(5) (6) (8)L + 5.75%6.92%05/08/202827,720 27,241 26,453 2.13 
15
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Triple Lift, Inc.(5) (8) (15)L + 5.75%6.92%05/08/20281,533 $1,466 $1,351 0.11 %
95,416 93,452 7.53 
IT Services
Atlas Purchaser, Inc.(6) (8)L + 5.25%6.62%05/08/20288,967 8,812 7,353 0.59 
Donuts, Inc.(5) (6) (7)L + 6.00%7.00%12/29/202618,469 18,172 18,184 1.47 
Donuts, Inc.(5) (7)S + 6.00%7.00%12/29/20276,769 6,769 6,665 0.54 
Donuts, Inc.(5) (7) (15)S + 6.00%7.00%12/29/2027— — (49)(0.00)
Govbrands Intermediate, Inc.(5) (6)L + 5.50%9.25%08/04/202739,961 39,089 38,490 3.10 
Govbrands Intermediate, Inc.(5) (15)L + 5.50%9.25%08/04/20278,991 8,751 8,506 0.69 
Govbrands Intermediate, Inc.(5) (15)L + 5.50%9.25%08/04/2027— (90)(156)(0.01)
Long Term Care Group, Inc.(5) (8)L + 6.00%7.25%09/08/20274,988 4,892 4,892 0.39 
Recovery Point Systems, Inc.(5) (6) (7)L + 6.50%7.50%08/12/202641,265 40,659 41,265 3.33 
Recovery Point Systems, Inc.(5) (7) (15)L + 6.50%7.50%08/12/2026— (55)— 0.00 
Redwood Services Group, LLC(5) (8)S + 6.00%7.70%06/15/202910,966 10,747 10,747 0.87 
Redwood Services Group, LLC(5) (8) (15)S + 6.00%7.70%06/15/2029— (26)(26)(0.00)
Syntax Systems Ltd(5) (8) (11)L + 5.50%7.17%10/29/202835,632 35,303 33,665 2.71 
Syntax Systems Ltd(5) (8) (11) (15)L + 5.50%7.17%10/29/2028— (85)(516)(0.04)
Syntax Systems Ltd(5) (8) (11) (15)L + 5.50%7.17%10/29/20262,086 2,054 1,879 0.15 
Thrive Buyer, Inc. (Thrive Networks)(5) (6) (7)L + 6.00%8.25%01/22/202720,666 20,330 20,633 1.66 
Thrive Buyer, Inc. (Thrive Networks)(5) (7) (15)L + 6.00%8.25%01/22/202716,064 15,770 16,037 1.29 
Thrive Buyer, Inc. (Thrive Networks)(5) (7) (15)P + 5.00%9.75%01/22/2027264 232 261 0.02 
Upstack Holdco, Inc.(5) (7)L + 5.50%7.71%08/20/20279,786 9,570 9,717 0.78 
Upstack Holdco, Inc.(5) (7) (15)L + 5.50%7.71%08/20/20273,308 3,214 3,278 0.26 
Upstack Holdco, Inc.(5) (7) (15)L + 5.50%7.71%08/20/2027— (21)(6)(0.00)
224,087 220,819 17.80 
Leisure Products
GSM Acquisition Corp. (GSM Outdoors)(5) (6) (7)S + 5.00%7.14%11/16/202617,536 17,394 17,444 1.41 
GSM Acquisition Corp. (GSM Outdoors)(5) (7)S + 5.00%7.14%11/16/20264,513 4,464 4,490 0.36 
GSM Acquisition Corp. (GSM Outdoors)(5) (7) (15)S + 5.00%7.14%11/16/20262,948 2,904 2,926 0.24 
24,762 24,860 2.00 
16
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Machinery
Answer Target Holdco, LLC(5) (7)L + 5.75%8.00%12/30/202610,773 $10,576 $10,379 0.84 %
Answer Target Holdco, LLC(5) (7) (15)L + 5.75%8.00%12/30/2026— (15)(31)(0.00)
Komline-Sanderson Group, Inc.(5) (6) (9)L + 6.00%7.18%03/17/202620,978 20,797 20,773 1.67 
Komline-Sanderson Group, Inc.(5) (9) (15)L + 6.00%7.18%03/17/202619,166 18,930 18,896 1.52 
Komline-Sanderson Group, Inc.(5) (15)P + 5.00%7.18%03/17/2026633 598 586 0.05 
50,886 50,603 4.08 
Multi-Utilities
AWP Group Holdings, Inc.(5) (6) (7)L + 4.75%6.91%12/22/2027895 883 874 0.07 
AWP Group Holdings, Inc.(5) (7) (15)L + 4.75%6.91%12/22/2027132 129 126 0.01 
AWP Group Holdings, Inc.(5) (7) (15)L + 4.75%6.91%12/22/202662 60 58 0.00 
Ground Penetrating Radar Systems, LLC(5) (6)S + 4.75%6.27%06/26/202610,358 10,200 10,082 0.81 
Ground Penetrating Radar Systems, LLC(5) (15)S + 4.75%6.27%06/26/2025656 634 612 0.05 
Vessco Midco Holdings, LLC(5) (6) (7)L + 4.50%7.38%11/02/20262,722 2,701 2,693 0.22 
Vessco Midco Holdings, LLC(5) (7)L + 4.50%7.38%11/02/20261,773 1,760 1,754 0.14 
Vessco Midco Holdings, LLC(5) (15)P + 3.50%8.25%10/18/202699 96 95 0.01 
16,463 16,294 1.31 
Oil, Gas & Consumable Fuels
Energy Labs Holdings Corp.(5) (7)S + 5.25%6.25%04/07/2028390 384 384 0.03 
Energy Labs Holdings Corp.(5) (7) (15)S + 5.25%6.25%04/07/2028— (1)(1)(0.00)
Energy Labs Holdings Corp.(5) (7) (15)S + 5.25%6.25%04/07/202812 11 11 0.00 
3943940.03 
Professional Services
Abacus Data Holdings, Inc. (AbacusNext)(5) (6) (7)L + 6.25%7.25%03/10/202718,711 18,365 18,597 1.50 
Abacus Data Holdings, Inc. (AbacusNext)(5) (7) (15)L + 6.25%7.25%03/10/20271,960 1,929 1,939 0.16 
Abacus Data Holdings, Inc. (AbacusNext)(5) (7) (15)L + 6.25%7.25%03/10/2027— (26)(9)(0.00)
Bullhorn, Inc.(5) (6) (7)L + 5.75%8.00%09/30/202613,013 12,901 12,883 1.04 
Bullhorn, Inc.(5) (7) (15)L + 5.75%8.00%09/30/202651 39 24 0.00 
Bullhorn, Inc.(5) (7) (15)L + 5.75%8.00%09/30/2026— (6)(6)(0.00)
Citrin Cooperman Advisors, LLC(5) (8)L + 5.00%6.47%10/01/202720,126 19,766 19,766 1.59 
17
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Citrin Cooperman Advisors, LLC(5) (8)L + 5.00%6.47%10/01/20278,621 $8,462 $8,462 0.68 %
Project Boost Purchaser, LLC(5) (8)S + 5.50%6.90%05/02/20295,428 5,375 5,375 0.43 
Project Boost Purchaser, LLC(5) (8) (15)S + 5.50%6.90%05/02/2029— (6)(6)(0.00)
Project Boost Purchaser, LLC(5) (8) (15)S + 5.50%6.90%05/02/2027— (4)(4)(0.00)
66,795 67,021 5.40 
Real Estate Management & Development
Associations, Inc.(5) (6) (7)L + 4.00%; 2.50% PIK7.50%07/02/202716,055 15,920 15,920 1.28 
Associations, Inc.(5) (7) (15)L + 4.00%; 2.50% PIK7.50%07/02/202714,086 13,895 13,907 1.12 
Associations, Inc.(5) (7) (15)L + 4.00%; 2.50% PIK7.50%07/02/2027— (16)(16)(0.00)
MRI Software, LLC(5) (6) (7)L + 5.50%7.75%02/10/202659,790 59,319 59,491 4.79 
MRI Software, LLC(5) (7) (15)L + 5.50%7.75%02/10/2026— (13)(11)(0.00)
Zarya Intermediate, LLC(5) (6) (7)L + 6.50%7.56%07/01/202724,500 24,077 24,182 1.95 
Zarya Intermediate, LLC(5) (7)L + 6.50%7.56%07/01/202719,250 18,911 19,000 1.53 
Zarya Intermediate, LLC(5) (7) (15)L + 6.50%7.56%07/01/2027— (79)(61)(0.00)
132,014 132,412 10.67 
Software
Alert Media, Inc.(5) (6) (7)S + 5.00%6.01%04/12/202714,000 13,827 13,827 1.11 
Alert Media, Inc.(5) (7) (15)S + 5.00%6.01%04/10/2026— (20)(20)(0.00)
Anaplan, Inc.(5) (8)S + 6.50%8.01%06/21/202924,000 23,521 23,521 1.90 
APEX Analytix(5) (10)S + 5.75%7.95%08/18/20264,131 4,048 4,048 0.33 
APEX Analytix(5) (10) (15)S + 5.75%7.95%06/30/2028— (9)(9)(0.00)
Appfire Technologies, LLC(5) (7)S + 5.50%7.70%03/09/20279,507 9,469 9,365 0.75 
Appfire Technologies, LLC(5) (7) (15)S + 5.50%7.70%03/09/2027— (66)(142)(0.01)
Appfire Technologies, LLC(5) (7) (15)S + 5.50%7.70%03/09/202710 7 7 0.00 
Assembly Intermediate, LLC(5) (7)L + 7.00%9.88%10/19/202720,741 20,365 20,307 1.64 
Assembly Intermediate, LLC(5) (7) (15)L + 7.00%9.88%10/19/20271,244 1,187 1,136 0.09 
Assembly Intermediate, LLC(5) (7) (15)L + 7.00%9.88%10/19/2027415 378 371 0.03 
Bottomline Technologies, Inc.(5)S + 5.50%6.74%05/14/20293,200 3,137 3,137 0.25 
Bottomline Technologies, Inc.(5) (15)S + 5.50%6.74%01/27/2028— (5)(5)(0.00)
18
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
CLEO Communications Holding, LLC(5) (6) (7)L + 6.75%8.19%06/09/202739,998 $39,656 $38,858 3.13 %
CLEO Communications Holding, LLC(5) (7) (15)L + 6.75%8.19%06/09/2027— (103)(356)(0.03)
Cordeagle US Finco, Inc.(5) (7) (11)L + 6.75%7.99%07/30/202718,200 17,881 18,058 1.46 
Cordeagle US Finco, Inc.(5) (7) (11) (15)L + 6.75%7.99%07/30/2027— (47)(22)(0.00)
Diligent Corporation(5) (6) (7)L + 5.75%8.63%08/04/202527,650 27,446 27,194 2.19 
Diligent Corporation(5) (6) (7)L + 5.75%8.00%08/04/20252,212 2,183 2,146 0.17 
Diligent Corporation(15)L + 6.25%8.34%08/04/20252,250 2,218 2,176 0.18 
GS AcquisitionCo, Inc.(5) (7) (15)L + 5.75%7.26%05/22/202674,188 73,638 73,262 5.90 
GS AcquisitionCo, Inc.(5) (6) (7)L + 5.75%7.26%05/22/2026— (24)(75)(0.01)
GS AcquisitionCo, Inc.(5) (7) (15)L + 5.75%8.63%05/22/2026605 583 575 0.05 
Gurobi Optimization, LLC(5) (7) (15)L + 5.00%6.67%12/19/202313,158 13,093 13,156 1.06 
Gurobi Optimization, LLC(5) (6) (7)L + 5.00%6.67%12/19/2023— (8)— 0.00 
Kaseya, Inc.(5) (7) (15)S + 5.75%8.29%06/25/202914,099 13,888 13,888 1.12 
Kaseya, Inc.(5) (8)S + 5.75%8.29%05/02/2029— (6)(13)(0.00)
Kaseya, Inc.(5) (8) (15)S + 5.75%8.29%05/02/2029— (13)(13)(0.00)
LegitScript(5)S + 5.75%7.26%06/24/202921,667 21,234 21,234 1.71 
LegitScript(5) (15)S + 5.75%7.26%06/24/2029— (283)(283)(0.02)
LegitScript(5) (15)S + 5.75%7.26%06/24/2028— (83)(83)(0.01)
Netwrix Corporation And Concept Searching, Inc.(5) (8)S + 5.00%6.50%06/01/20294,116 4,075 4,075 0.33 
Netwrix Corporation And Concept Searching, Inc.(5) (8) (15)S + 5.00%6.50%06/01/2029— (11)(11)(0.00)
Netwrix Corporation And Concept Searching, Inc.(5) (8) (15)S + 5.00%6.50%06/01/2029— (4)(4)(0.00)
Oak Purchaser, Inc.(5)L + 5.50%7.55%04/28/20282,792 2,764 2,764 0.22 
Oak Purchaser, Inc.(5) (15)L + 5.50%7.55%04/30/2029— (18)(18)(0.00)
Oak Purchaser, Inc.(5) (15)L + 5.50%7.55%04/30/2029— (4)(4)(0.00)
Pound Bidco, Inc.(5) (6) (7) (11)L + 6.50%7.50%01/30/20269,012 8,871 9,012 0.73 
Pound Bidco, Inc.(5) (6) (7) (11) (15)L + 6.50%7.50%01/30/2026— (17)— 0.00 
Project Leopard Holdings, Inc.(5) (10) (11)S + 5.25%7.45%06/16/20286,280 5,840 5,840 0.47 
Revalize, Inc.(5) (15)L + 5.75%8.00%04/15/202719,645 19,517 18,852 1.52 
Revalize, Inc.(5) (15)L + 5.75%8.00%04/15/202744 44 42 0.00 
Securonix, Inc.(5) (8)S + 6.50%7.25%04/05/202821,010 20,654 20,654 1.66 
19
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Securonix, Inc.(5) (8) (15)S + 6.50%7.25%04/05/2028— $(64)$(64)(0.01)%
Skykick, Inc.(5) (7)L + 7.25%8.25%09/01/20276,300 6,160 6,245 0.50 
Skykick, Inc.(5) (7) (15)L + 7.25%8.25%09/01/2027— (28)(23)(0.00)
Trunk Acquisition, Inc.(5) (7)L + 6.00%8.25%02/19/20279,097 9,014 8,745 0.70 
Trunk Acquisition, Inc.(5) (7) (15)L + 6.00%8.25%02/19/2026— (8)(33)(0.00)
User Zoom Technologies, Inc.(5) (8)S + 5.75%6.50%04/01/202938,689 37,931 37,931 3.06 
401,808 399,248 32.17 
Total First Lien Debt$2,525,593 $2,500,321 201.50 %
Second Lien Debt
Air Freight & Logistics
Omni Logistics(5) (8)L + 9.00%11.18%12/30/20274,500 $4,365 $4,365 0.35 %
Auto Components
PAI Holdco, Inc.(5) (7)L + 5.50%, 2.00% PIK8.74%10/28/202825,768 25,140 24,639 1.99 
Electronic Equipment, Instruments & Components
Infinite Bidco, LLC(5) (9)L + 7.00%9.25%03/02/202917,000 16,935 17,000 1.37 
Infinite Bidco, LLC(5) (9) (15)L + 7.00%9.25%03/02/2029— — — 0.00 
16,935 17,000 1.37 
Energy Equipment & Services
QBS Parent, Inc.(5)L + 8.50%10.17%09/21/202615,000 14,789 14,067 1.13 
Health Care Providers & Services
Heartland Veterinary Partners, LLC(5) (7)L + 8.00%9.00%12/10/20273,960 3,887 3,757 0.30 
Heartland Veterinary Partners, LLC(5) (7) (15)L + 8.00%9.00%12/10/2027981 963 903 0.07 
4,850 4,660 0.38 
Industrial Conglomerates
Aptean, Inc.(5)L + 7.00%8.67%04/23/20275,950 5,950 5,950 0.48 
IT Services
Help/Systems Holdings, Inc.(8)L + 6.75%7.56%11/19/202717,500 17,500 16,669 1.34 
Idera, Inc.(5) (8)L + 6.75%7.82%03/02/20293,887 3,861 3,887 0.31 
Red Dawn SEI Buyer, Inc.(5) (7)L + 8.50%10.75%11/20/202619,000 18,619 18,477 1.49 
20
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
$39,980 $39,033 3.15 %
Software
Flexera Software, LLC(5) (7)L + 7.00%8.62%03/03/202913,500 13,263 13,203 1.06 
Matrix Parent, Inc.(5)S + 8.00%9.55%03/01/203010,667 10,485 10,240 0.83 
23,748 23,443 1.89 
Total Second Lien Debt$135,757 $133,157 10.73 %
Other Securities
Unsecured Debt
Familia Intermediate Holdings I Corp. (Teasdale Latin Foods)(5) (12) (13)16.25% PIK06/18/20261,800 $1,777 $523 0.04 %
Total Unsecured Debt$1,777 $523 0.04 %
21
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Acquisition DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Preferred Equity
Diligent Corporation(5) (14)10.50%04/05/20215,000 $5,398 $5,597 0.45 %
FORTIS Solutions Group, LLC(5) (14)12.25%06/24/20221,000,000 975 980 0.08 
Help HP SCF Investor, LP(11) (14)05/12/202112,460 15,603 1.26 
Integrity Marketing Acquisition, LLC(5) (14)10.50%12/21/20213,250,000 3,279 3,374 0.27 
Knockout Intermediate Holdings I, Inc.(5) (14)11.75%06/25/20222,790 2,720 2,720 0.22 
Revalize, Inc.(5) (14)11.00%12/14/20211,500 1,518 1,561 0.13 
Skykick, Inc.(5) (14)08/31/2021134,101 1,276 1,363 0.11 
Total Preferred Equity$27,626 $31,198 2.51 %
Common Equity
Abacus Data Holdings, Inc. (AbacusNext)(5) (14)03/09/202129,441 $2,944 $2,708 0.22 %
BP Purchaser, LLC(5) (14)12/10/20211,233,333 1,233 1,233 0.10 
CSC Thrive Holdings, LP (Thrive Networks)(5) (14)03/01/2021160,016 412 758 0.06 
Encore Holdings, LLC(5) (14)11/23/20212,391 275 318 0.03 
GSM Equity Investors, LP (GSM Outdoors)(5) (14)11/16/20204,500 450 1,141 0.09 
LUV Car Wash(5) (14)04/06/20229797 97 0.01 
mPulse Mobile, Inc.(5) (14)12/17/2021165,761 1,220 1,220 0.10 
PCX Holding Corp.(5) (14)04/22/20216,538 654 1,089 0.09 
Pet Holdings, Inc. (Brightpet)(5) (14)10/06/202012,313 1,231 1,034 0.08 
Pritchard Industries, Inc.(5) (14)10/13/20211,700,000 1,700 1,813 0.15 
Procure Acquiom Financial, LLC (Procure Analytics)(5) (14)12/20/20211,000,000 1,000 1,165 0.09 
RPS Group Holdings (Recovery Point Systems, Inc.)(5) (14)03/05/20211,000,000 1,000 766 0.06 
Shelby Co-invest, LP. (Spectrum Automotive)(5) (14)06/29/20218,500 850 1,077 0.09 
Suveto Buyer, LLC(5) (11) (14)11/19/202117,000 1,700 2,361 0.19 
Total Common Equity$14,766 $16,780 1.35 %
Total Other Securities$44,169 $48,501 3.91 %
Total Portfolio Investments$2,705,519 $2,681,979 216.13 %

22
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
(1)
Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of June 30, 2022, the Company does not “control” any of these portfolio companies. Under the 1940 Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of June 30, 2022, the Company is not an “affiliated person” of any of its portfolio companies.
(2)
Unless otherwise indicated, the Company’s investments are pledged as collateral supporting the amounts outstanding under the Truist Credit Facility (as defined below). See Note 6 “Debt”.
(3)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to London Interbank Offered Rate (“LIBOR” or “L”), Secured Overnight Financing Rate (“SOFR” and “S”) or an alternate base rate (commonly based on the Federal Funds Rate (“F”) or the U.S. Prime Rate (“P”)), each of which generally resets periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2022. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at June 30, 2022. As of June 30, 2022, the reference rates for our LIBOR-based loans were the 30-day L at 1.79%, the 90-day L at 2.29%, the 180-day L at 2.94%; the reference rates for our SOFR-based loans were the 30-day S at 1.09%, the 90-day S at 0.70%, the 180-day S at 0.39%; and the reference rate for our Prime rate-based loans were at 4.75%.
(4)The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(5)These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by or under the direction of the Company's Board of Directors (the "Board of Directors" or the "Board") (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(6)Assets or a portion thereof are pledged as collateral for the BNP Funding Facility. See Note 6 “Debt”.
(7)Loan includes interest rate floor of 1.00%.
(8)Loan includes interest rate floor of 0.75%.
(9)Loan includes interest rate floor of 0.50%.
(10)
Position or portion thereof unsettled as of June 30, 2022.
(11)
The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of June 30, 2022, non-qualifying assets represented 5.9% of total assets as calculated in accordance with regulatory requirements.
(12)
Represents a senior unsecured note, which is subordinated to senior secured term loans of the portfolio company.
(13)
Investment was on non-accrual status as of June 30, 2022.
(14)
Securities exempt from registration under the Securities Act of 1933, and may be deemed to be “restricted securities”. As of June 30, 2022, the aggregate fair value of these securities is $47,978 or 3.9% of the Company’s net assets. The initial acquisition dates have been included for such securities.
(15)
Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may earn unused commitment fees. Negative cost and fair value, if any, results from unamortized fees, which are capitalized to the cost of the investment. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments as of June 30, 2022:

Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
First Lien Debt
365 Retail Markets, LLC0.50%Revolver12/23/2026$2,550 $(32)
48Forty Solutions, LLC1.00%Delayed Draw Term Loan02/11/2024610 (6)
48Forty Solutions, LLC0.50%Revolver11/30/20262,715 (52)
Abacus Data Holdings, Inc. (AbacusNext)1.00%Delayed Draw Term Loan09/08/20221,540 (9)
Abacus Data Holdings, Inc. (AbacusNext)0.50%Revolver03/10/20271,400 (9)
ABB Concise Optical Group, LLC0.50%Revolver02/23/2028245 (9)
Alert Media, Inc.0.50%Revolver04/10/20261,750 (20)
AMCP Pet Holdings, Inc. (Brightpet)0.50%Revolver10/05/2026146 (3)
Answer Target Holdco, LLC0.50%Revolver12/30/2026833 (30)
23
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
APEX Analytix—%Revolver06/30/2028457 (9)
Appfire Technologies, LLC1.00%Delayed Draw Term Loan01/05/20238,634 (128)
Appfire Technologies, LLC0.50%Delayed Draw Term Loan06/13/20241,878 (14)
Appfire Technologies, LLC0.50%Revolver03/09/2027157 (2)
Applitools, Inc.0.50%Revolver05/25/2028433 (9)
ARI Network Services, Inc.0.50%Revolver02/28/20252,606 (58)
Assembly Intermediate, LLC0.50%Delayed Draw Term Loan10/19/20233,941 (82)
Assembly Intermediate, LLC0.50%Revolver10/19/20271,659 (35)
Associations, Inc.1.00%Delayed Draw Term Loan06/10/20247,240 (61)
Associations, Inc.0.50%Revolver07/02/20271,860 (16)
AWP Group Holdings, Inc.1.00%Delayed Draw Term Loan12/22/2022132 (3)
AWP Group Holdings, Inc.0.50%Revolver12/22/202696 (2)
Bearcat Buyer, Inc.1.00%Delayed Draw Term Loan11/23/2022513 (9)
Bottomline Technologies, Inc.0.50%Revolver01/27/2028267 (5)
Bullhorn, Inc.0.50%Delayed Draw Term Loan02/11/20242,685 (27)
Bullhorn, Inc.0.50%Revolver09/30/2026593 (6)
CC SAG Holdings Corp. (Spectrum Automotive)1.00%Delayed Draw Term Loan06/29/20233,278 (160)
CC SAG Holdings Corp. (Spectrum Automotive)0.50%Revolver06/29/2027881 (43)
CLEO Communications Holding, LLC0.50%Revolver06/09/202712,502 (356)
Cordeagle US Finco, Inc.0.50%Revolver07/30/20272,800 (22)
DCA Investment Holdings, LLC1.00%Delayed Draw Term Loan03/12/2023829 (8)
Diligent Corporation1.00%Delayed Draw Term Loan10/05/20221,776 (29)
Diligent Corporation0.50%Revolver08/04/20252,250 (37)
Donuts, Inc.0.25%Delayed Draw Term Loan08/14/20233,166 (49)
Electrical Source Holdings, LLC0.50%Revolver11/25/2025918 (10)
Encore Holdings, LLC0.75%Delayed Draw Term Loan11/23/20242,484 (55)
Encore Holdings, LLC0.50%Revolver11/23/2027539 (12)
Energy Labs Holdings Corp.1.00%Delayed Draw Term Loan04/13/202347 — 
Energy Labs Holdings Corp.0.50%Revolver04/07/202851 (1)
FLS Holding, Inc.1.00%Delayed Draw Term Loan06/17/20234,506 (91)
FLS Holding, Inc.0.50%Revolver12/17/20271,802 (36)
FMG Suite Holdings, LLC0.50%Delayed Draw Term Loan10/28/20225,250 (115)
FMG Suite Holdings, LLC0.50%Revolver10/30/20262,625 (57)
Fortis Solutions Group, LLC0.50%Delayed Draw Term Loan10/15/20232,564 (43)
Fortis Solutions Group, LLC0.50%Delayed Draw Term Loan06/24/20241,000 (15)
Fortis Solutions Group, LLC0.50%Revolver10/15/20272,519 (44)
Foundation Risk Partners, Corp.0.50%Revolver10/29/20274,571 (67)
Galway Borrower, LLC0.50%Delayed Draw Term Loan09/30/20233,710 (65)
24
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Galway Borrower, LLC0.50%Revolver09/30/20271,375 (24)
Gateway US Holdings, Inc.1.00%Delayed Draw Term Loan04/15/2024171 (2)
Gateway US Holdings, Inc.0.50%Revolver09/22/202429 — 
Govbrands Intermediate, Inc.1.00%Delayed Draw Term Loan08/04/20234,185 (154)
Govbrands Intermediate, Inc.0.50%Revolver08/04/20274,238 (156)
GraphPad Software, LLC0.50%Revolver04/27/20271,750 (58)
Ground Penetrating Radar Systems,0.50%Revolver06/26/2025984 (26)
GS AcquisitionCo, Inc.0.50%Delayed Draw Term Loan11/03/20225,988 (75)
GS AcquisitionCo, Inc.0.50%Revolver05/22/20261,815 (23)
GSM Acquisition Corp. (GSM Outdoors)0.50%Revolver11/16/20261,332 (7)
Gurobi Optimization, LLC0.50%Revolver12/19/20231,607 — 
Heartland Home Services0.75%Delayed Draw Term Loan08/10/20231,305 (53)
Heartland Veterinary Partners, LLC0.50%Delayed Draw Term Loan11/17/20233,097 (57)
Heartland Veterinary Partners, LLC0.50%Revolver12/10/2026375 (7)
High Street Buyer, Inc.0.50%Revolver04/16/20272,136 (11)
Kaseya, Inc.0.50%Delayed Draw Term Loan06/22/2024856 (13)
Kaseya, Inc.0.50%Revolver05/02/2029856 (13)
Keystone Agency Investors1.00%Delayed Draw Term Loan06/03/20241,925 (28)
Komline-Sanderson Group, Inc.0.50%Delayed Draw Term Loan05/27/20248,529 (83)
Komline-Sanderson Group, Inc.0.50%Revolver03/17/20264,113 (40)
KPSKY Acquisition, Inc.1.00%Delayed Draw Term Loan06/17/20243,900 (78)
KPSKY Acquisition, Inc.1.00%Delayed Draw Term Loan10/19/2023238 (5)
KWOR Acquisition, Inc.1.00%Delayed Draw Term Loan06/22/20244,777 (95)
KWOR Acquisition, Inc.0.50%Revolver12/22/2027106 (2)
LegitScript—%Delayed Draw Term Loan06/24/202414,167 (283)
LegitScript0.50%Revolver06/24/20284,167 (83)
Lightspeed Buyer, Inc.1.00%Delayed Draw Term Loan02/28/20234,050 (99)
Lightspeed Solution, LLC0.50%Delayed Draw Term Loan03/01/20242,439 (93)
LUV Car Wash Group, LLC1.00%Delayed Draw Term Loan03/14/2024336 (8)
Majesco0.50%Revolver09/21/20261,575 (22)
Mammoth Holdings, LLC0.50%Revolver10/16/2023953 (8)
MHE Intermediate Holdings, LLC0.50%Revolver07/21/20272,500 (42)
mPulse Mobile, Inc.1.00%Delayed Draw Term Loan12/17/20231,996 (61)
mPulse Mobile, Inc.0.50%Revolver12/17/2027504 (15)
MRI Software, LLC0.50%Revolver02/10/20262,215 (11)
MSM Acquisitions, Inc.1.00%Delayed Draw Term Loan01/30/202323,439 (541)
MSM Acquisitions, Inc.0.50%Revolver12/09/20262,704 (62)
Netwrix Corporation And Concept Searching, Inc.0.50%Delayed Draw Term Loan06/09/20242,954 (11)
25
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Netwrix Corporation And Concept Searching, Inc.0.25%Revolver06/01/2029431 (4)
Oak Purchaser, Inc.0.50%Delayed Draw Term Loan04/28/20241,861 (18)
Oak Purchaser, Inc.0.50%Revolver04/30/2029372 (4)
Oakbridge Insurance Agency, LLC1.00%Delayed Draw Term Loan03/31/20241,319 (50)
Oakbridge Insurance Agency, LLC0.50%Revolver12/31/202644 (2)
Omni Intermediate Holdings, LLC1.00%Delayed Draw Term Loan09/30/2023732 (15)
Omni Intermediate Holdings, LLC1.00%Delayed Draw Term Loan08/23/2022385 (4)
Omni Intermediate Holdings, LLC1.00%Delayed Draw Term Loan12/01/2023173 (2)
Omni Intermediate Holdings, LLC0.50%Revolver12/30/20251,065 (21)
Patriot Growth Insurance Services, LLC—%Delayed Draw Term Loan10/14/20238,970 (309)
Patriot Growth Insurance Services, LLC0.50%Revolver10/16/20284,485 (154)
PCX Holding Corp.1.00%Delayed Draw Term Loan04/07/20249,253 (231)
PCX Holding Corp.0.50%Revolver04/22/20271,604 (40)
Peter C. Foy & Associates Insurance Services, LLC1.00%Delayed Draw Term Loan12/14/20232,286 (34)
Peter C. Foy & Associates Insurance Services, LLC0.50%Revolver11/01/2027832 (12)
Pound Bidco, Inc.0.50%Revolver01/30/20261,163 — 
Pritchard Industries, LLC1.00%Delayed Draw Term Loan10/13/20234,047 (192)
Procure Acquireco, Inc. (Procure Analytics)0.50%Delayed Draw Term Loan12/20/2023794 (27)
Procure Acquireco, Inc. (Procure Analytics)0.50%Revolver12/01/2026238 (8)
Project Boost Purchaser, LLC1.00%Delayed Draw Term Loan05/02/20241,123 (5)
Project Boost Purchaser, LLC0.50%Revolver05/02/2027449 (4)
Promptcare Infusion Buyer, Inc.1.00%Delayed Draw Term Loan09/01/20232,997 (110)
QW Holding Corporation1.00%Delayed Draw Term Loan05/02/20241,226 (13)
QW Holding Corporation0.50%Revolver08/31/20242,250 (31)
Recovery Point Systems, Inc.0.50%Revolver08/12/20264,000 — 
Redwood Services Group, LLC—%Delayed Draw Term Loan12/22/20232,609 (26)
Revalize, Inc.0.50%Delayed Draw Term Loan06/13/2023693 (27)
Revalize, Inc.0.50%Revolver04/15/202727 (1)
RSC Acquisition, Inc.0.50%Delayed Draw Term Loan11/12/20234,498 (44)
Securonix, Inc.0.50%Revolver04/05/20283,782 (64)
Sherlock Buyer Corp.0.50%Delayed Draw Term Loan12/08/20233,215 (69)
Sherlock Buyer Corp.0.50%Revolver12/08/20271,286 (28)
Skykick, Inc.1.00%Delayed Draw Term Loan03/01/20232,625 (23)
Smarsh, Inc.1.00%Delayed Draw Term Loan02/18/20241,072 (28)
Smarsh, Inc.0.50%Revolver02/16/2029268 (7)
Sonny's Enterprises, LLC1.00%Delayed Draw Term Loan11/01/202221,225 (824)
Stepping Stones Healthcare Services, LLC1.00%Delayed Draw Term Loan01/14/20241,250 (52)
Stepping Stones Healthcare Services, LLC0.50%Revolver12/30/2026625 (26)
26
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Summit Buyer, LLC1.00%Delayed Draw Term Loan06/23/202311,329 (391)
Summit Buyer, LLC0.50%Revolver01/14/20262,420 (83)
Suveto Buyer, LLC1.00%Delayed Draw Term Loan09/09/20235,082 (127)
Suveto Buyer, LLC0.50%Revolver09/09/2027940 (23)
Sweep Purchaser, LLC1.00%Delayed Draw Term Loan05/05/20241,073 (12)
Sweep Purchaser, LLC0.50%Revolver11/30/2026934 (14)
Syntax Systems Ltd1.00%Delayed Draw Term Loan10/29/20239,357 (516)
Syntax Systems Ltd0.50%Revolver10/29/20261,657 (91)
Tamarack Intermediate, LLC1.00%Revolver03/13/2028900 (42)
Tank Holding Corp.0.50%Revolver03/31/2028467 (9)
Thrive Buyer, Inc. (Thrive Networks)1.00%Delayed Draw Term Loan12/30/20231,101 (2)
Thrive Buyer, Inc. (Thrive Networks)0.50%Revolver01/22/20271,717 (3)
Triple Lift, Inc.0.50%Revolver05/08/20282,467 (113)
Trunk Acquisition, Inc.0.50%Revolver02/19/2026857 (33)
Two Six Labs, LLC0.50%Delayed Draw Term Loan08/20/20232,134 (51)
Two Six Labs, LLC0.50%Revolver08/20/20272,134 (51)
United Flow Technologies Intermediate Holdco II, LLC1.00%Delayed Draw Term Loan10/29/20231,252 (39)
United Flow Technologies Intermediate Holdco II, LLC0.50%Revolver10/29/20263,000 (95)
Upstack Holdco, Inc.1.00%Delayed Draw Term Loan08/26/20231,050 (7)
Upstack Holdco, Inc.0.50%Revolver08/20/2027875 (6)
V Global Holdings, LLC0.50%Revolver12/22/2025571 (11)
Valcourt Holdings II, LLC1.00%Delayed Draw Term Loan01/07/20231,911 (11)
Vardiman Black Holdings, LLC0.50%Delayed Draw Term Loan03/18/20242,598 (130)
Vessco Midco Holdings, LLC0.50%Revolver10/18/2026348 (4)
VRC Companies, LLC0.75%Delayed Draw Term Loan12/28/20223,979 (165)
VRC Companies, LLC0.50%Revolver06/29/20271,240 (51)
World Insurance Associates, LLC0.50%Revolver04/01/2026761 (15)
Zarya Intermediate, LLC0.50%Revolver07/01/20274,666 (61)
Total First Lien Debt Unfunded Commitments386,788 (8,965)
Second Lien Debt
Heartland Veterinary Partners, LLC0.50%Delayed Draw Term Loan01/17/2023559 (29)
Infinite Bidco, LLC1.00%Delayed Draw Term Loan03/14/20238,500 — 
Total Second Lien Debt Unfunded Commitments9,059 (29)
Total Unfunded Commitments$395,847 $(8,994)
27
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (Audited)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
First Lien Debt
Aerospace and Defense
Jonathan Acquisition Company(5) (7)L + 5.00%6.00%12/22/20262,739 $2,671 $2,671 0.22 %
PCX Holding Corp.(5) (6) (7)L + 6.25%7.25%04/22/202718,417 18,250 18,417 1.55 
PCX Holding Corp.(5) (7) (13)L + 6.25%7.25%04/22/20277,386 7,309 7,386 0.62 
PCX Holding Corp.(5) (7) (13)L + 6.25%7.25%04/22/2027— (16)— 0.00 
Two Six Labs, LLC(5) (8)L + 5.50%6.25%08/20/202711,070 10,859 10,960 0.92 
Two Six Labs, LLC(5) (8) (13)L + 5.50%6.25%08/20/2027— (40)(43)0.00 
Two Six Labs, LLC(5) (8) (13)L + 5.50%6.25%08/20/2027— (40)(21)0.00 
38,993 39,370 3.31 
Air Freight & Logistics
Omni Intermediate Holdings, LLC(5) (7)L + 5.00%6.00%12/30/202610,621 10,516 10,516 0.88 
Omni Intermediate Holdings, LLC(5) (7) (13)L + 5.00%6.00%12/30/20261,195 1,176 1,176 0.10 
Omni Intermediate Holdings, LLC(5) (7) (13)L + 5.00%6.00%12/30/2025266 256 256 0.02 
11,948 11,948 1.01 
Auto Components
CC SAG Holdings Corp. (Spectrum Automotive)(5) (6) (8)L + 5.75%6.50%06/29/202823,890 23,553 23,613 1.99 
CC SAG Holdings Corp. (Spectrum Automotive)(5) (8) (13)L + 5.75%6.50%06/29/20282,167 2,105 2,091 0.18 
CC SAG Holdings Corp. (Spectrum Automotive)(5) (8) (13)L + 5.75%6.50%06/29/2027— (12)(10)0.00 
Sonny’s Enterprises, Inc.(5) (7)L + 5.50%6.50%08/05/20267,075 6,938 6,938 0.58 
Sonny’s Enterprises, Inc.(5) (6) (7)L + 6.75%7.75%08/05/20265,414 5,321 5,321 0.45 
Sonny’s Enterprises, Inc.(5) (7) (13)L + 6.75%7.75%08/05/202614,447 14,203 14,203 1.19 
Sonny’s Enterprises, Inc.(5) (7) (13)L + 5.50%6.50%08/05/2026— (410)(410)(0.03)
51,698 51,746 4.35 
Automobiles
ARI Network Services, Inc.(5) (6) (7)L + 6.50%7.50%02/28/202520,931 20,563 20,767 1.75 
ARI Network Services, Inc.(5) (6) (7) (13)L + 6.50%7.50%02/28/20253,667 3,603 3,639 0.31 
ARI Network Services, Inc.(5) (7) (13)L + 6.50%7.50%02/28/20251,333 1,281 1,310 0.11 
Summit Buyer, LLC(5) (7)L + 5.00%6.00%01/14/202622,344 21,923 22,167 1.86 
Summit Buyer, LLC(5) (7) (13)L + 5.00%6.00%01/14/202618,887 18,416 18,630 1.57 
Summit Buyer, LLC(5) (7) (13)L + 5.00%6.00%01/14/2026— (43)(19)0.00 
Turbo Buyer, Inc.(5) (7)L + 6.00%7.00%12/02/202538,325 37,645 37,580 3.16 
Turbo Buyer, Inc.(5) (7) (13)L + 6.00%7.00%12/02/202536,890 36,086 36,142 3.04 
Vehlo Purchaser, LLC(5) (8)L + 5.00%5.75%08/27/202727,154 26,638 26,725 2.25 
Vehlo Purchaser, LLC(5) (8) (13)L + 5.00%5.75%08/27/20277,875 7,614 7,568 0.64 
28
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Vehlo Purchaser, LLC(5) (8) (13)L + 5.00%5.75%08/27/20271,167 $1,057 $1,074 0.09 %
174,783 175,583 14.77 
Biotechnology
GraphPad Software, LLC(5) (6) (7)L + 5.50%6.50%04/27/202715,110 14,971 14,971 1.26 
GraphPad Software, LLC(5) (7) (13)L + 6.00%7.00%04/27/2027— (16)(16)0.00 
14,955 14,955 1.26 
Commercial Services & Supplies
365 Retail Markets, LLC(5) (7)L + 4.75%5.75%12/23/202617,456 17,167 17,238 1.45 
365 Retail Markets, LLC(5) (7) (13)L + 4.75%5.75%12/23/2026— (34)(34)0.00 
365 Retail Markets, LLC(5) (7) (13)L + 4.75%5.75%12/23/2026800 754 765 0.06 
Capstone Acquisition Holdings, Inc.(5) (6) (7)L + 4.75%5.75%11/12/20273,460 3,433 3,460 0.29 
Capstone Acquisition Holdings, Inc.(5) (7) (13)L + 4.75%5.75%11/12/2027194 191 194 0.02 
Encore Holdings, LLC(5) (8)L + 4.50%5.25%11/23/20281,868 1,836 1,836 0.15 
Encore Holdings, LLC(5) (8) (13)L + 4.50%5.25%11/23/2028512 477 477 0.04 
Encore Holdings, LLC(5) (8) (13)L + 4.50%5.25%11/23/2027— (9)(9)0.00 
FLS Holding, Inc.(5) (7) (10)L + 5.25%6.25%12/17/202828,750 28,178 28,178 2.37 
FLS Holding, Inc.(5) (7) (10) (13)L + 5.25%6.25%12/17/2028— (62)(62)(0.01)
FLS Holding, Inc.(5) (7) (10) (13)L + 5.25%6.25%12/17/2027— (50)(50)0.00 
KWOR Acquisition, Inc.(5) (8)L + 5.25%6.00%12/22/2028878 865 865 0.07 
KWOR Acquisition, Inc.(5) (13)P + 4.25%7.50%12/22/202712 10 10 0.00 
MHE Intermediate Holdings, LLC(5) (6) (7)L + 5.75%6.75%07/21/202728,678 28,139 28,392 2.39 
MHE Intermediate Holdings, LLC(5) (7) (13)L + 5.75%6.75%07/21/20272,160 2,104 2,122 0.18 
MHE Intermediate Holdings, LLC(5) (7) (13)L + 5.75%6.75%07/21/2027— (46)(25)0.00 
PDFTron US Acquisition Corp.(5) (6) (7) (10)L + 5.50%6.50%07/15/202730,723 30,226 29,894 2.52 
PDFTron US Acquisition Corp.(5) (7) (10) (13)L + 5.50%6.50%07/15/20276,160 6,044 5,896 0.50 
PDFTron US Acquisition Corp.(5) (7) (10) (13)L + 5.50%6.50%07/15/2026— (140)(208)(0.02)
Pritchard Industries, LLC(5) (8)L + 5.50%6.25%10/13/202725,789 25,289 25,289 2.13 
Pritchard Industries, LLC(5) (8) (13)L + 5.50%6.25%10/13/2027— (59)(59)0.00 
Procure Acquireco, Inc. (Procure Analytics)(5) (8)L + 5.50%6.25%12/20/20283,968 3,889 3,889 0.33 
Procure Acquireco, Inc. (Procure Analytics)(5) (8) (13)L + 5.50%6.25%12/20/2028— (8)(8)0.00 
Procure Acquireco, Inc. (Procure Analytics)(5) (8) (13)L + 5.50%6.25%12/20/2028— (5)(5)0.00 
Sherlock Buyer Corp.(5) (8)L + 5.75%6.50%12/08/202811,145 10,923 10,923 0.92 
Sherlock Buyer Corp.(5) (8) (13)L + 5.75%6.50%12/08/2028— (32)(32)0.00 
Sherlock Buyer Corp.(5) (8) (13)L + 5.75%6.50%12/08/2027— (25)(25)0.00 
Sweep Purchaser, LLC(5) (7)L + 5.75%6.75%11/30/20268,793 8,644 8,644 0.73 
Sweep Purchaser, LLC(5) (7) (13)L + 5.75%6.75%11/30/20265,029 4,942 4,942 0.42 
29
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Sweep Purchaser, LLC(5) (13)P + 4.75%8.00%11/30/2026450 $427 $427 0.04 %
United Flow Technologies Intermediate Holdco II, LLC(5) (7)L + 5.75%6.75%10/29/202717,100 16,766 16,766 1.41 
United Flow Technologies Intermediate Holdco II, LLC(5) (7) (13)L + 5.75%6.75%10/29/20272,400 2,280 2,280 0.19 
United Flow Technologies Intermediate Holdco II, LLC(5) (7) (13)L + 5.75%6.75%10/29/2026— (58)(58)0.00 
US Infra Svcs Buyer, LLC(5) (6) (7)L + 6.50%7.50%04/13/202616,991 16,734 16,903 1.42 
US Infra Svcs Buyer, LLC(5) (7) (13)L + 6.50%7.50%04/13/20262,398 2,246 2,343 0.20 
US Infra Svcs Buyer, LLC(5) (7) (13)L + 6.50%7.50%04/13/20262,025 1,993 2,013 0.17 
Valcourt Holdings II, LLC(5) (6) (7)L + 5.50%6.50%01/07/202735,431 34,816 35,431 2.98 
Valcourt Holdings II, LLC(5) (7) (13)L + 5.50%6.50%01/07/20272,521 2,405 2,521 0.21 
Vessco Midco Holdings, LLC(5) (6) (7)L + 4.50%5.50%11/02/20262,735 2,713 2,735 0.23 
Vessco Midco Holdings, LLC(5) (7) (13)L + 4.50%5.50%11/02/20261,472 1,457 1,472 0.12 
Vessco Midco Holdings, LLC(5) (13)P + 3.50%6.75%10/18/202620 16 20 0.00 
VRC Companies, LLC(5) (6) (8)L + 5.50%6.25%06/29/202749,335 48,644 48,921 4.12 
VRC Companies, LLC(5) (6) (8) (13)L + 5.50%6.25%06/29/20273,263 3,148 3,193 0.27 
VRC Companies, LLC(5) (8) (13)L + 5.50%6.25%06/29/2027— (23)(14)0.00 
306,205 307,450 25.87 
Construction & Engineering
KPSKY Acquisition, Inc.(5) (8)L + 5.50%6.25%10/19/202834,557 33,882 33,882 2.85 
KPSKY Acquisition, Inc.(5) (13)P + 4.50%7.75%10/19/20281,975 1,917 1,917 0.16 
35,799 35,799 3.01 
Containers & Packaging
BP Purchaser, LLC(5) (8)L + 5.50%6.25%12/10/202817,467 17,120 17,120 1.44 
Fortis Solutions Group, LLC(5) (8)L + 5.50%6.25%10/13/202819,430 19,051 19,051 1.60 
Fortis Solutions Group, LLC(5) (8) (13)L + 5.50%6.25%10/13/2028— (76)(76)(0.01)
Fortis Solutions Group, LLC(5) (8) (13)L + 5.50%6.25%10/15/2027— (52)(52)0.00 
36,043 36,043 3.03 
Distributors
PT Intermediate Holdings III, LLC(5) (8)L + 5.50%6.25%11/01/202817,400 17,228 17,228 1.45 
PT Intermediate Holdings III, LLC(5) (8) (13)L + 5.50%6.25%11/01/202811,521 11,408 11,408 0.96 
28,636 28,636 2.41 
Diversified Consumer Services
Mammoth Holdings, LLC(5) (6) (7)L + 6.00%7.00%10/16/20238,117 8,058 8,117 0.68 
Mammoth Holdings, LLC(5) (7) (13)L + 6.00%7.00%10/16/202328,858 28,590 28,858 2.43 
Mammoth Holdings, LLC(5) (7) (13)L + 6.00%7.00%10/16/2023— (6)— 0.00 
36,642 36,975 3.11 
30
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Diversified Financial Services
SitusAMC Holdings Corporation(5) (8)L + 5.75%6.50%12/22/20273,600 $3,564 $3,564 0.30 %
Food Products
AMCP Pet Holdings, Inc. (Brightpet)(5) (6) (7)L + 6.25%7.25%10/05/202633,825 32,969 33,527 2.82 
AMCP Pet Holdings, Inc. (Brightpet)(5) (7) (13)L + 6.25%7.25%10/05/2026— (119)(44)0.00 
AMCP Pet Holdings, Inc. (Brightpet)(5) (7) (13)L + 6.25%7.25%10/05/20263,938 3,796 3,886 0.33 
Nellson Nutraceutical, Inc.(5) (6) (7)L + 5.25%6.25%12/23/202324,606 24,292 24,606 2.07 
Nellson Nutraceutical, Inc.(5) (6)P + 4.25%7.50%12/23/202366 65 66 0.01 
Teasdale Foods, Inc. (Teasdale Latin Foods)(5) (7)L + 6.25%; 1.00% PIK8.25%12/18/202511,148 10,965 10,029 0.84 
71,968 72,070 6.06 
Health Care Equipment & Supplies
Performance Health Holdings, Inc.(5) (6) (7)L + 6.00%7.00%07/12/202710,474 10,278 10,474 0.88 
Health Care Providers & Services
Bearcat Buyer, Inc.(5) (6) (7)L + 4.75%5.75%07/09/20266,843 6,700 6,843 0.58 
Bearcat Buyer, Inc.(5) (7) (13)L + 4.75%5.75%07/09/20266,262 6,122 6,262 0.53 
DCA Investment Holdings, LLC(5) (6) (8)L + 6.25%7.00%03/12/202711,175 11,027 11,175 0.94 
DCA Investment Holdings, LLC(5) (8) (13)L + 6.25%7.00%03/12/20271,079 1,053 1,079 0.09 
Heartland Veterinary Partners, LLC(5) (7)L + 4.75%5.75%12/10/20261,885 1,866 1,866 0.16 
Heartland Veterinary Partners, LLC(5) (7) (13)L + 4.75%5.75%12/10/2026424 383 383 0.03 
Heartland Veterinary Partners, LLC(5) (7) (13)L + 4.75%5.75%12/10/2026— (4)(4)0.00 
mPulse Mobile, Inc.(5) (8)L + 5.25%6.00%12/17/202717,500 17,152 17,152 1.44 
mPulse Mobile, Inc.(5) (8) (13)L + 5.25%6.00%12/17/2027— (20)(20)0.00 
mPulse Mobile, Inc.(5) (8) (13)L + 5.25%6.00%12/17/2027— (10)(10)0.00 
Promptcare Infusion Buyer, Inc.(5) (7)L + 6.00%7.00%09/01/20279,165 8,990 8,948 0.75 
Promptcare Infusion Buyer, Inc.(5) (7) (13)L + 6.00%7.00%09/01/2027837 792 745 0.06 
Suveto Buyer, LLC(5) (8) (13)L + 4.25%5.00%09/09/20277,755 7,643 7,608 0.64 
Suveto Buyer, LLC(5) (13)P + 3.25%6.50%09/09/2027590 575 575 0.05 
62,269 62,602 5.27 
Health Care Technology
Lightspeed Buyer, Inc.(5) (6) (7)L + 5.75%6.75%02/03/202612,797 12,506 12,229 1.03 
Lightspeed Buyer, Inc.(5) (7) (13)L + 5.75%6.75%02/03/20269,328 9,056 8,734 0.73 
21,562 20,963 1.76 
Industrial Conglomerates
Electrical Source Holdings LLC(5) (6) (8)L + 5.50%6.25%11/25/202529,550 29,330 29,550 2.49 
Electrical Source Holdings LLC(5) (6) (8) (13)L + 5.50%6.25%11/25/20256,538 6,449 6,538 0.55 
31
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Electrical Source Holdings LLC(5) (8) (13)L + 5.50%6.25%11/25/2025197 $179 $197 0.02 %
35,958 36,285 3.05 
Insurance
Foundation Risk Partners, Corp.(5) (8)L + 5.75%6.50%10/29/202843,291 42,654 42,654 3.59 
Foundation Risk Partners, Corp.(5) (8) (13)L + 5.75%6.50%10/29/20285,378 5,269 5,269 0.44 
Foundation Risk Partners, Corp.(5) (8) (13)L + 5.75%6.50%10/29/2027— (67)(67)(0.01)
Galway Borrower, LLC(5) (8)L + 5.25%6.00%09/29/202826,722 26,203 26,260 2.21 
Galway Borrower, LLC(5) (8) (13)L + 5.25%6.00%09/29/20281,843 1,766 1,736 0.15 
Galway Borrower, LLC(5) (8) (13)L + 5.25%6.00%09/30/2027— (39)(35)0.00 
Higginbotham Insurance Agency, Inc.(5) (6) (8)L + 5.50%6.25%11/25/202614,558 14,374 14,413 1.21 
Higginbotham Insurance Agency, Inc.(5) (8) (13)L + 5.50%6.25%11/25/20264,110 4,055 4,069 0.34 
High Street Buyer, Inc.(5) (6) (8)L + 6.00%6.75%04/14/202810,093 9,908 10,093 0.85 
High Street Buyer, Inc.(5) (6) (8) (13)L + 6.00%6.75%04/14/202837,138 36,402 37,138 3.12 
High Street Buyer, Inc.(5) (8) (13)L + 6.00%6.75%04/16/2027— (38)— 0.00 
Integrity Marketing Acquisition, LLC(5) (6) (8) (13)L + 5.50%6.25%08/27/202558,911 58,193 58,193 4.90 
Integrity Marketing Acquisition, LLC(5) (7) (13)L + 5.75%6.75%08/27/202524,849 24,545 24,545 2.07 
Keystone Agency Investors(5) (7)L + 5.50%6.50%05/03/20272,003 1,973 1,974 0.17 
Keystone Agency Investors(5) (7) (13)L + 5.50%6.50%05/03/2027— (38)(38)0.00 
Majesco(5) (6) (7)L + 7.25%8.25%09/21/202723,660 23,104 23,660 1.99 
Majesco(5) (7) (13)L + 7.25%8.25%09/21/2026— (37)— 0.00 
Patriot Growth Insurance Services, LLC(5) (6) (8)L + 5.50%6.25%10/14/202845,812 44,918 44,918 3.78 
Patriot Growth Insurance Services, LLC(5) (7) (13)L + 5.75%6.75%10/16/2028— (171)(171)(0.01)
Patriot Growth Insurance Services, LLC(5) (8) (13)L + 5.50%6.25%10/14/2027— (86)(86)(0.01)
Peter C. Foy & Associates Insurance Services, LLC(5) (8)L + 6.00%6.75%11/01/202817,972 17,796 17,796 1.50 
Peter C. Foy & Associates Insurance Services, LLC(5) (8) (13)L + 6.00%6.75%11/01/20283,433 3,392 3,392 0.29 
Peter C. Foy & Associates Insurance Services, LLC(5) (8) (13)L + 6.00%6.75%11/01/2027— (8)(8)0.00 
RSC Acquisition, Inc.(5) (6) (8)L + 5.50%6.25%10/30/202618,667 18,287 18,484 1.56 
RSC Acquisition, Inc.(5) (8) (13)L + 5.50%6.25%10/30/20265,911 5,772 5,772 0.49 
World Insurance Associates, LLC(5) (6) (7)L + 5.75%6.75%04/01/202633,658 32,601 32,996 2.78 
World Insurance Associates, LLC(5) (6) (7) (13)L + 5.75%6.75%04/01/202631,487 30,671 30,868 2.60 
World Insurance Associates, LLC(5) (7) (13)L + 5.75%6.75%04/01/202695 74 70 0.01 
401,473 403,895 33.98 
Interactive Media & Services
FMG Suite Holdings, LLC(5) (7)L + 5.50%6.50%10/30/202622,253 21,854 22,171 1.87 
FMG Suite Holdings, LLC(5) (7) (13)L + 5.50%6.50%10/30/2026— (92)(19)0.00 
FMG Suite Holdings, LLC(5) (7) (13)L + 5.50%6.50%10/30/2026— (46)(10)0.00 
32
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
MSM Acquisitions, Inc.(5) (6) (7)L + 6.00%7.00%12/09/202631,890 $31,412 $31,571 2.66 %
MSM Acquisitions, Inc.(5) (7) (13)L + 6.00%7.00%12/09/20269,782 9,488 9,419 0.79 
MSM Acquisitions, Inc.(5) (13)P + 5.00%8.25%12/09/2026365 300 326 0.03 
Triple Lift, Inc.(5) (6) (8)L + 5.75%6.50%05/08/202827,860 27,345 27,604 2.32 
Triple Lift, Inc.(5) (8) (13)L + 5.75%6.50%05/08/2028— (72)(37)0.00 
90,189 91,025 7.66 
IT Services
Atlas Purchaser, Inc.(6) (8)L + 5.25%6.00%05/08/202817,413 17,090 17,064 1.44 
Donuts, Inc.(5) (6) (7)L + 6.00%7.00%12/29/202618,563 18,237 18,563 1.56 
Govbrands Intermediate, Inc.(5) (6) (8)L + 5.50%6.25%08/04/202740,162 39,214 39,214 3.30 
Govbrands Intermediate, Inc.(5) (8) (13)L + 5.50%6.25%08/04/20279,059 8,795 8,795 0.74 
Govbrands Intermediate, Inc.(5) (8) (13)L + 5.50%6.25%08/04/2027— (99)(99)(0.01)
Recovery Point Systems, Inc.(5) (6) (7)L + 6.50%7.50%08/12/202641,475 40,805 41,475 3.49 
Recovery Point Systems, Inc.(5) (7) (13)L + 6.50%7.50%08/12/2026— (61)— 0.00 
Syntax Systems Ltd(5) (8) (10)L + 5.50%6.25%10/29/202835,811 35,460 35,460 2.98 
Syntax Systems Ltd(5) (8) (10) (13)L + 5.50%6.25%10/29/2028— (91)(91)(0.01)
Syntax Systems Ltd(5) (8) (10) (13)L + 5.50%6.25%10/29/20261,637 1,601 1,601 0.13 
Thrive Buyer, Inc. (Thrive Networks)(5) (6) (7)L + 6.00%7.00%01/22/202720,770 20,402 20,402 1.72 
Thrive Buyer, Inc. (Thrive Networks)(5) (7) (13)L + 6.00%7.00%01/22/20278,031 7,763 7,763 0.65 
Thrive Buyer, Inc. (Thrive Networks)(5) (7) (13)L + 6.00%7.00%01/22/2027— (35)(35)0.00 
Upstack Holdco, Inc.(5) (7)L + 6.00%7.00%08/20/20279,844 9,609 9,635 0.81 
Upstack Holdco, Inc.(5) (7) (13)L + 6.00%7.00%08/20/20273,325 3,223 3,232 0.27 
Upstack Holdco, Inc.(5) (7) (13)L + 6.00%7.00%08/20/2027— (23)(19)0.00 
201,890 202,960 17.08 
Leisure Products
GSM Acquisition Corp. (GSM Outdoors)(5) (6) (7)L + 5.00%6.00%11/16/202647,701 47,196 47,701 4.01 
GSM Acquisition Corp. (GSM Outdoors)(5) (7) (13)L + 5.00%6.00%11/16/20267,199 7,096 7,199 0.61 
54,292 54,900 4.62 
Machinery
Answer Target Holdco, LLC(5) (7)L + 6.00%7.00%12/30/202610,827 10,611 10,611 0.89 
33
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Answer Target Holdco, LLC(5) (7) (13)L + 6.00%7.00%12/30/2026— $(16)$(16)0.00 %
Komline-Sanderson Group, Inc.(5) (9)L + 6.00%6.50%03/17/202616,798 16,643 16,462 1.39 
Komline-Sanderson Group, Inc.(5) (9) (13)L + 6.00%6.50%03/17/202619,263 19,090 18,877 1.59 
Komline-Sanderson Group, Inc.(5) (9) (13)L + 6.00%6.50%03/17/20262,294 2,254 2,199 0.19 
48,582 48,133 4.05 
Multi-Utilities
AWP Group Holdings, Inc.(5) (6) (7)L + 4.75%5.75%12/22/2027899 888 899 0.08 
AWP Group Holdings, Inc.(5) (7) (13)L + 4.75%5.75%12/22/2027132 129 132 0.01 
AWP Group Holdings, Inc.(5) (7) (13)L + 4.75%5.75%12/22/202643 41 43 0.00 
Ground Penetrating Radar Systems, LLC(5) (6) (7)L + 4.75%5.75%06/26/20268,771 8,619 8,771 0.74 
Ground Penetrating Radar Systems, LLC(5) (7) (13)L + 4.75%5.75%06/26/2025755 728 755 0.06 
10,405 10,600 0.89 
Professional Services
Abacus Data Holdings, Inc. (AbacusNext)(5) (6) (7)L + 6.25%7.25%03/10/202718,806 18,428 18,806 1.58 
Abacus Data Holdings, Inc. (AbacusNext)(5) (7) (13)L + 6.25%7.25%03/10/2027— (34)— 0.00 
Abacus Data Holdings, Inc. (AbacusNext)(5) (7) (13)L + 6.25%7.25%03/10/2027210 181 210 0.02 
Bullhorn, Inc.(5) (6) (7)L + 5.75%6.75%09/30/20269,675 9,573 9,629 0.81 
Bullhorn, Inc.(5) (7) (13)L + 5.75%6.75%09/30/2026— (25)(25)0.00 
Bullhorn, Inc.(5) (7) (13)L + 5.75%6.75%09/30/2026— (6)(3)0.00 
Citrin Cooperman Advisors, LLC(5) (8)L + 5.00%5.75%10/01/202720,176 19,787 19,787 1.66 
Citrin Cooperman Advisors, LLC(5) (8) (13)L + 5.00%5.75%10/01/2027— (83)(83)(0.01)
Citrin Cooperman Advisors, LLC(5) (8) (13)L + 5.00%5.75%10/01/2027— (469)(469)(0.04)
IQN Holding Corp., dba Beeline(5) (6) (7)L + 5.50%6.50%08/20/202444,355 44,205 44,355 3.73 
IQN Holding Corp., dba Beeline(5) (7) (13)L + 5.50%6.50%08/21/2023— (10)— 0.00 
91,547 92,207 7.76 
Real Estate Management & Development
Associations, Inc.(5) (6) (7)L + 4.00%; 2.50% PIK7.50%07/02/202715,853 15,706 15,853 1.33 
Associations, Inc.(5) (7) (13)L + 4.00%; 2.50% PIK7.50%07/02/20272,723 2,698 2,723 0.23 
Associations, Inc.(5) (7) (13)L + 6.50%7.50%07/02/202711,187 11,083 11,187 0.94 
Associations, Inc.(5) (7) (13)L + 6.50%7.50%07/02/2027— (17)— 0.00 
34
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
MRI Software, LLC(5) (7)L + 5.50%6.50%02/10/202649,090 $48,603 $49,090 4.13 %
MRI Software, LLC(5) (6) (7) (13)L + 5.50%6.50%02/10/2026362 338 362 0.03 
MRI Software, LLC(5) (7) (13)L + 5.50%6.50%02/10/2026— (15)— 0.00 
Zarya Intermediate, LLC(5) (6) (7)L + 6.50%7.50%07/01/202724,500 24,043 24,500 2.06 
Zarya Intermediate, LLC(5) (7) (13)L + 6.50%7.50%07/01/202719,250 18,884 19,250 1.62 
Zarya Intermediate, LLC(5) (7) (13)L + 6.50%7.50%07/01/2027— (86)— 0.00 
121,237 122,965 10.35 
Software
Alert Media, Inc.(5) (6) (7)L + 5.00%6.00%04/12/202714,000 13,811 13,657 1.15 
Alert Media, Inc.(5) (7) (13)L + 5.00%6.00%04/10/2026— (22)(43)0.00 
Appfire Technologies, LLC(5) (7)L + 5.50%6.50%03/09/20274,663 4,643 4,663 0.39 
Appfire Technologies, LLC(5) (7) (13)L + 5.50%6.50%03/09/2027— (59)— 0.00 
Assembly Intermediate, LLC(5) (7)L + 7.00%8.00%10/19/202720,741 20,337 20,337 1.71 
Assembly Intermediate, LLC(5) (7) (13)L + 7.00%8.00%10/19/20271,244 1,182 1,182 0.10 
Assembly Intermediate, LLC(5) (7) (13)L + 7.00%8.00%10/19/2027— (40)(40)0.00 
CLEO Communications Holding, LLC(5) (6) (7)L + 6.75%7.75%06/09/202739,998 39,628 39,366 3.31 
CLEO Communications Holding, LLC(5) (7) (13)L + 6.75%7.75%06/09/2027— (113)(197)(0.02)
Cordeagle US Finco, Inc.(5) (7) (10)L + 6.75%7.75%07/30/202718,200 17,856 18,200 1.53 
Cordeagle US Finco, Inc.(5) (7) (10) (13)L + 6.75%7.75%07/30/2027— (52)— 0.00 
Diligent Corporation(5) (6) (7)L + 5.75%6.75%08/04/202527,790 27,555 27,790 2.34 
Diligent Corporation(5) (6) (7) (13)L + 5.75%6.75%08/04/2025860 826 860 0.07 
Diligent Corporation(5) (7) (13)L + 5.75%6.75%08/04/2025— (37)— 0.00 
GS AcquisitionCo, Inc.(5) (6) (7)L + 5.75%6.75%05/22/202669,710 69,108 69,361 5.84 
GS AcquisitionCo, Inc.(5) (7) (13)L + 5.75%6.75%05/22/2026— (26)(54)0.00 
GS AcquisitionCo, Inc.(5) (7) (13)L + 5.75%6.75%05/22/20261,149 1,125 1,137 0.10 
Gurobi Optimization, LLC(5) (6) (7)L + 5.00%6.00%12/19/202313,226 13,139 13,226 1.11 
Gurobi Optimization, LLC(5) (7) (13)L + 5.00%6.00%12/19/2023— (10)— 0.00 
Pound Bidco, Inc.(5) (6) (7) (10)L + 6.50%7.50%01/30/20269,012 8,854 8,854 0.74 
Pound Bidco, Inc.(5) (6) (7) (10) (13)L + 6.50%7.50%01/30/2026— (19)(19)0.00 
Revalize, Inc.(5) (7) (13)L + 5.25%6.25%04/15/202719,715 19,570 19,512 1.64 
35
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Revalize, Inc.(5) (7) (13)L + 5.25%6.25%04/15/2027— $(1)$(1)0.00 %
Skykick, Inc.(5) (7)L + 7.25%8.25%09/01/20276,300 6,149 6,149 0.52 
Skykick, Inc.(5) (7) (13)L + 7.25%8.25%09/01/2027— (31)(31)0.00 
Trunk Acquisition, Inc.(5) (7)L + 6.00%7.00%02/19/20279,143 9,052 9,052 0.76 
Trunk Acquisition, Inc.(5) (7) (13)L + 6.00%7.00%02/19/2026— (9)(9)0.00 
252,416 252,952 21.28 
Total First Lien Debt$2,213,332 $2,224,100 187.12 %
Second Lien Debt
Auto Components
PAI Holdco, Inc.(5) (7)L + 5.50%, 2.00% PIK8.50%10/28/202825,509 $24,843 $25,509 2.15 %
Electronic Equipment, Instruments & Components
Infinite Bidco, LLC(5) (9)L + 7.00%7.50%03/02/202917,000 16,931 17,000 1.43 
Infinite Bidco, LLC(5) (9) (13)L + 7.00%7.50%03/02/2029— (19)— 0.00 
16,912 17,000 1.43 
Energy Equipment & Services
QBS Parent, Inc.(5)L + 8.50%8.72%09/21/202615,000 14,769 14,748 1.24 
Health Care Providers & Services
Heartland Veterinary Partners, LLC(5) (7)L + 8.00%9.00%12/10/20273,960 3,881 3,882 0.33 
Heartland Veterinary Partners, LLC(5) (7) (13)L + 8.00%9.00%12/10/2027585 574 574 0.05 
4,455 4,456 0.37 
Industrial Conglomerates
Aptean, Inc.(5) (8)L + 7.00%7.75%04/23/20275,950 5,950 5,950 0.50 
IT Services
Help/Systems Holdings, Inc.(5) (8)L + 6.75%7.50%11/19/202717,500 17,500 17,500 1.47 
Idera, Inc.(5) (8)L + 6.75%7.50%03/02/20293,887 3,860 3,887 0.33 
Red Dawn SEI Buyer, Inc.(5) (7)L + 8.50%9.50%11/20/202619,000 18,584 19,000 1.60 
39,944 40,387 3.40 
Software
Flexera Software, LLC(5) (7)L + 7.00%8.00%03/03/202913,500 13,251 13,500 1.14 
Total Second Lien Debt$120,124 $121,550 10.23 %
36
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and Spread
Interest Rate(3)
Maturity DatePar Amount/ Shares
Cost(4)
Fair Value Percentage of Net Assets
Other Securities
Unsecured Debt
Familia Intermediate Holdings I Corp. (Teasdale Latin Foods)(5) (11)16.25% PIK06/18/20261,800 $1,777 $1,350 0.11 %
Total Unsecured Debt$1,777 $1,350 0.11 %
37
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)(2)
FootnotesReference Rate and SpreadAcquisition DatePar Amount/ Shares
Cost(4)
Fair ValuePercentage of Net Assets
Preferred Equity
Diligent Corporation(5) (12)10.50%04/05/20215,000 $5,143 $5,295 0.45 %
Integrity Marketing Acquisition, LLC(5) (12)10.50%12/22/20213,250,000 3,185 3,185 0.27 
Revalize, Inc.(5) (12)11.00%12/14/20211,500 1,470 1,470 0.12 
Skykick, Inc.(5) (12)08/31/2021134,101 1,275 1,298 0.11 
Total Preferred Equity11,073 11,248 0.95 
Common Equity
Abacus Data Holdings, Inc. (AbacusNext)(5) (12)07/12/202129,441 2,944 2,714 0.23 
BP Purchaser, LLC(5) (12)12/10/20211,233,333 1,233 1,233 0.10 
CSC Thrive Holdings, LP (Thrive Networks)(5) (12)03/01/2021160,016 411 531 0.04 
Encore Holdings, LLC(5) (12)11/23/20212,391 275 275 0.02 
GSM Equity Investors, LP (GSM Outdoors)(5) (12)11/16/20204,500 450 1,242 0.10 
Help HP SCF Investor, LP(10) (12)05/12/202112,460 13,751 1.16 
mPulse Mobile, Inc.(5) (12)12/17/2021165,761 1,220 1,220 0.10 
PCX Holding Corp.(5) (12)04/22/20216,538 654 965 0.08 
Pet Holdings, Inc. (Brightpet)(5) (12)10/06/202012,313 1,232 1,052 0.09 
Pritchard Industries, Inc.(5) (12)10/13/20211,700,000 1,700 1,700 0.14 
Procure Acquiom Financial, LLC (Procure Analytics)(5) (12)12/20/20211,000,000 1,000 1,000 0.08 
RPS Group Holdings (Recovery Point Systems, Inc.)(5) (12)03/05/20211,000,000 1,000 750 0.06 
Shelby Co-invest, LP. (Spectrum Automotive)(5) (12)06/29/20218,500 850 993 0.08 
Suveto Buyer, LLC(5) (10) (12)11/19/202117,000 1,700 1,700 0.14 
Total Common Equity27,129 29,126 2.45 
Total Other Securities$39,979 $41,724 3.51 %
Total Portfolio Investments$2,373,435 $2,387,374 200.86 %
38
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
(1)
Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2021, the Company does not “control” any of these portfolio companies. Under the 1940 Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2021, the Company is not an “affiliated person” of any of its portfolio companies.
(2)
Unless otherwise indicated, the Company’s investments are pledged as collateral supporting the amounts outstanding under the Truist Credit Facility (as defined below). See Note 6 "Debt".
(3)
Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate (“F”) or the U.S. Prime Rate (“P”)), each of which generally resets periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2021. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at December 31, 2021. As of December 31, 2021, the reference rates for our variable rate loans were the 30-day L at 0.10%, the 90-day L at 0.21%, the 180-day L at 0.34%, and the P at 3.25%.
(4)The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(5)These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by or under the direction of the Board of Directors (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(6)Assets or a portion thereof are pledged as collateral for the BNP Funding Facility. See Note 6 “Debt”.
(7)Loan includes interest rate floor of 1.00%.
(8)Loan includes interest rate floor of 0.75%.
(9)Loan includes interest rate floor of 0.50%.
(10)
The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2021, non-qualifying assets represented 5.7% of total assets as calculated in accordance with regulatory requirements.
(11)
Represents a senior unsecured note, which is subordinated to senior secured term loans of the portfolio company.
(12)
Securities exempt from registration under the Securities Act of 1933, and may be deemed to be “restricted securities”. As of December 31, 2021, the aggregate fair value of these securities is $40,374 or 3.4% of the Company’s net assets. The initial acquisition dates have been included for such securities.
(13)
Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may earn unused commitment fees. Negative cost and fair value, if any, results from unamortized fees, which are capitalized to the cost of the investment. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments as of December 31, 2021:

Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
First Lien Debt
365 Retail Markets, LLC1.00%Delayed Draw Term Loan11/05/2023$5,557 $(34)
365 Retail Markets, LLC0.50%Revolver12/23/20262,000 (25)
Abacus Data Holdings, Inc. (AbacusNext)1.00%Delayed Draw Term Loan09/08/20223,500 — 
Abacus Data Holdings, Inc. (AbacusNext)0.50%Revolver03/10/20271,190 — 
Alert Media, Inc.0.50%Revolver04/10/20261,750 (43)
AMCP Pet Holdings, Inc. (Brightpet)1.00%Delayed Draw Term Loan04/06/20225,000 (44)
AMCP Pet Holdings, Inc. (Brightpet)0.50%Revolver10/05/20261,896 (17)
Answer Target Holdco, LLC0.50%Revolver12/30/2026833 (17)
Appfire Technologies, LLC0.50%Delayed Draw Term Loan01/05/202313,525 — 
ARI Network Services, Inc.0.50%Revolver02/28/20251,697 (13)
Assembly Intermediate, LLC1.00%Delayed Draw Term Loan10/19/20233,941 (47)
Assembly Intermediate, LLC0.50%Revolver10/19/20272,074 (40)
39
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Associations, Inc.0.50%Revolver07/02/2027$1,860 $— 
AWP Group Holdings, Inc.1.00%Delayed Draw Term Loan12/22/2022132 — 
AWP Group Holdings, Inc.0.50%Revolver12/22/2026114 — 
Bearcat Buyer, Inc.1.00%Delayed Draw Term Loan11/23/2022513 — 
Bullhorn, Inc.0.50%Delayed Draw Term Loan10/05/20225,172 (25)
Bullhorn, Inc.0.50%Revolver09/30/2026554 (3)
Capstone Acquisition Holdings, Inc.1.00%Delayed Draw Term Loan05/13/2022313 — 
CC SAG Holdings Corp. (Spectrum Automotive)1.00%Delayed Draw Term Loan06/29/20234,437 (52)
CC SAG Holdings Corp. (Spectrum Automotive)0.50%Revolver06/29/2027881 (10)
Citrin Cooperman Advisors, LLC1.00%Delayed Draw Term Loan10/01/20238,647 (83)
Citrin Cooperman Advisors, LLC0.50%Revolver10/01/202724,500 (469)
CLEO Communications Holding, LLC0.50%Revolver06/09/202712,502 (198)
Cordeagle US Finco, Inc.0.50%Revolver07/30/20272,800 — 
DCA Investment Holdings, LLC1.00%Delayed Draw Term Loan03/12/20231,689 — 
Diligent Corporation1.00%Delayed Draw Term Loan10/05/20223,136 — 
Diligent Corporation0.50%Revolver08/04/20254,500 — 
Electrical Source Holdings, LLC0.50%Revolver11/25/2025896 — 
Encore Holdings, LLC0.75%Delayed Draw Term Loan11/23/20243,081 (30)
Encore Holdings, LLC0.50%Revolver11/23/2027539 (9)
FLS Holding, Inc.1.00%Delayed Draw Term Loan06/17/20236,250 (62)
FLS Holding, Inc.0.50%Revolver12/17/20272,500 (50)
FMG Suite Holdings, LLC0.50%Delayed Draw Term Loan10/28/20225,250 (19)
FMG Suite Holdings, LLC0.50%Revolver10/30/20262,625 (10)
Fortis Solutions Group, LLC0.50%Delayed Draw Term Loan10/15/20237,871 (76)
Fortis Solutions Group, LLC0.50%Revolver10/15/20272,699 (52)
Foundation Risk Partners, Corp.1.00%Delayed Draw Term Loan10/29/20234,033 (47)
Foundation Risk Partners, Corp.0.50%Revolver10/29/20274,571 (67)
Galway Borrower, LLC0.50%Delayed Draw Term Loan09/30/20234,311 (75)
Galway Borrower, LLC0.50%Revolver09/30/20272,053 (36)
Govbrands Intermediate, Inc.1.00%Delayed Draw Term Loan08/04/20234,185 (83)
Govbrands Intermediate, Inc.0.50%Revolver08/04/20274,237 (99)
GraphPad Software, LLC0.50%Revolver04/27/20271,750 (16)
Ground Penetrating Radar Systems, LLC0.50%Revolver06/26/2025886 — 
GS AcquisitionCo, Inc.0.50%Delayed Draw Term Loan11/03/202210,833 (54)
GS AcquisitionCo, Inc.0.50%Revolver05/22/20261,270 (6)
GSM Acquisition Corp. (GSM Outdoors)0.50%Revolver11/16/20261,617 — 
Gurobi Optimization, LLC0.50%Revolver12/19/20231,607 — 
Heartland Veterinary Partners, LLC0.75%Delayed Draw Term Loan11/17/20233,816 (37)
40
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Heartland Veterinary Partners, LLC0.50%Revolver12/10/2026$375 $(4)
High Street Buyer, Inc.1.00%Delayed Draw Term Loan08/11/20233,385 — 
High Street Buyer, Inc.0.50%Revolver04/16/20272,136 — 
Integrity Marketing Acquisition, LLC1.00%Delayed Draw Term Loan12/03/20233,056 (38)
IQN Holding Corp., dba Beeline0.50%Revolver08/21/20234,545 — 
Keystone Agency Investors1.00%Delayed Draw Term Loan12/21/20232,578 (38)
Komline-Sanderson Group, Inc.0.50%Revolver03/17/20262,452 (49)
KPSKY Acquisition, Inc.—%Delayed Draw Term Loan10/19/20231,980 (29)
KWOR Acquisition, Inc.0.50%Revolver12/22/2027110 (2)
Lightspeed Buyer, Inc.1.00%Delayed Draw Term Loan02/28/20234,050 (180)
Majesco0.50%Revolver09/21/20261,575 — 
Mammoth Holdings, LLC0.50%Delayed Draw Term Loan12/15/20227,434 — 
Mammoth Holdings, LLC0.50%Revolver10/16/2023953 — 
MHE Intermediate Holdings, LLC1.00%Delayed Draw Term Loan07/21/20231,585 (16)
MHE Intermediate Holdings, LLC0.50%Revolver07/21/20272,500 (25)
mPulse Mobile, Inc.0.50%Delayed Draw Term Loan12/17/20231,996 (20)
mPulse Mobile, Inc.0.50%Revolver12/17/2027504 (10)
MRI Software, LLC0.50%Delayed Draw Term Loan03/24/202310,637 — 
MRI Software, LLC0.50%Revolver02/10/20262,215 — 
MSM Acquisitions, Inc.1.00%Delayed Draw Term Loan01/30/202326,515 (265)
MSM Acquisitions, Inc.0.50%Revolver12/09/20263,582 (36)
Omni Intermediate Holdings, LLC1.00%Delayed Draw Term Loan12/01/20231,264 (6)
Omni Intermediate Holdings, LLC0.50%Revolver12/30/2025799 (8)
Patriot Growth Insurance Services, LLC0.75%Delayed Draw Term Loan10/14/202317,620 (171)
Patriot Growth Insurance Services, LLC0.75%Revolver10/14/20274,485 (86)
PCX Holding Corp.1.00%Delayed Draw Term Loan04/22/20231,851 — 
PCX Holding Corp.0.50%Revolver04/22/20271,851 — 
PDFTron US Acquisition Corp.1.00%Delayed Draw Term Loan01/15/20233,640 (98)
PDFTron US Acquisition Corp.0.50%Revolver07/15/20267,700 (208)
Peter C. Foy & Associates Insurance Services, LLC1.00%Delayed Draw Term Loan05/02/20231,559 (13)
Peter C. Foy & Associates Insurance Services, LLC0.50%Revolver11/01/2027832 (8)
Pound Bidco, Inc.0.50%Revolver01/30/20261,163 (19)
Pritchard Industries, LLC1.00%Delayed Draw Term Loan10/13/20236,140 (59)
Procure Acquireco, Inc. (Procure Analytics)0.50%Delayed Draw Term Loan12/20/2023794 (8)
Procure Acquireco, Inc. (Procure Analytics)0.50%Revolver12/20/2028238 (5)
Promptcare Infusion Buyer, Inc.1.00%Delayed Draw Term Loan09/01/20233,050 (72)
PT Intermediate Holdings III, LLC—%Delayed Draw Term Loan05/11/202216,090 — 
Recovery Point Systems, Inc.0.50%Revolver08/12/20264,000 — 
41
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Revalize, Inc.0.50%Delayed Draw Term Loan06/13/2023$708 $(7)
Revalize, Inc.0.50%Revolver04/15/202771 (1)
RSC Acquisition, Inc.0.50%Delayed Draw Term Loan11/12/20238,474 (82)
Sherlock Buyer Corp.0.50%Delayed Draw Term Loan12/08/20233,215 (32)
Sherlock Buyer Corp.0.50%Revolver12/08/20271,286 (25)
Skykick, Inc.1.00%Delayed Draw Term Loan03/01/20232,625 (31)
Sonny’s Enterprises, Inc.1.00%Delayed Draw Term Loan11/01/202221,225 (410)
Summit Buyer, LLC1.00%Delayed Draw Term Loan06/23/202313,656 (108)
Summit Buyer, LLC0.50%Revolver01/14/20262,420 (19)
Suveto Buyer, LLC1.00%Delayed Draw Term Loan09/09/20238,442 (78)
Suveto Buyer, LLC0.50%Revolver09/09/2027707 (7)
Sweep Purchaser, LLC0.50%Revolver11/30/2026956 (16)
Syntax Systems Ltd1.00%Delayed Draw Term Loan10/29/20239,356 (91)
Syntax Systems Ltd0.50%Revolver10/29/20262,106 (20)
Thrive Buyer, Inc. (Thrive Networks)1.00%Delayed Draw Term Loan12/30/20236,442 (123)
Thrive Buyer, Inc. (Thrive Networks)0.50%Revolver01/22/20271,982 (35)
Triple Lift, Inc.0.50%Revolver05/08/20284,000 (37)
Trunk Acquisition, Inc.0.50%Revolver02/19/2026857 (8)
Turbo Buyer, Inc.1.00%Delayed Draw Term Loan11/15/20231,610 (31)
Two Six Labs, LLC0.50%Delayed Draw Term Loan08/20/20234,268 (43)
Two Six Labs, LLC0.50%Revolver08/20/20272,134 (21)
United Flow Technologies Intermediate Holdco II, LLC1.00%Delayed Draw Term Loan10/29/20237,500 (73)
United Flow Technologies Intermediate Holdco II, LLC0.50%Revolver10/29/20263,000 (58)
Upstack Holdco, Inc.1.00%Delayed Draw Term Loan08/26/20231,050 (22)
Upstack Holdco, Inc.0.50%Revolver08/20/2027875 (18)
US Infra Svcs Buyer, LLC1.00%Delayed Draw Term Loan04/13/20228,085 (42)
US Infra Svcs Buyer, LLC0.50%Revolver04/13/2026225 (1)
Valcourt Holdings II, LLC1.00%Delayed Draw Term Loan01/07/20234,378 — 
Vehlo Purchaser, LLC1.00%Delayed Draw Term Loan08/27/202311,569 (183)
Vehlo Purchaser, LLC0.50%Revolver08/27/20274,666 (74)
Vessco Midco Holdings, LLC1.00%Delayed Draw Term Loan11/02/2022309 — 
Vessco Midco Holdings, LLC0.50%Revolver10/18/2026427 — 
VRC Companies, LLC0.75%Delayed Draw Term Loan12/28/20225,000 (42)
VRC Companies, LLC0.50%Revolver06/29/20271,653 (14)
World Insurance Associates, LLC0.50%Revolver04/01/20261,173 (23)
Zarya Intermediate, LLC0.50%Revolver07/01/20271,983 — 
Zarya Intermediate, LLC0.50%Revolver07/01/20272,683 — 
Total First Lien Debt Unfunded Commitments$499,948 $(5,196)
42
Morgan Stanley Direct Lending Fund
Consolidated Schedule of Investments (continued)
December 31, 2021
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Second Lien Debt
Heartland Veterinary Partners, LLC0.75%Delayed Draw Term Loan11/17/2023$955 $(7)
Infinite Bidco, LLC1.00%Delayed Draw Term Loan03/02/20228,500 — 
Total Second Lien Debt Unfunded Commitments$9,455 $(7)
Total Unfunded Commitments$509,403 $(5,203)































43
Morgan Stanley Direct Lending Fund
Notes to Consolidated Financial Statements (Unaudited)
June 30, 2022
(In thousands, except shares and per share amounts)



(1)Organization
Morgan Stanley Direct Lending Fund (the “Company”) is a non-diversified, externally managed specialty finance company that is focused on lending to middle-market companies. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company has elected to be treated, and intends to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company is not a subsidiary of or consolidated with Morgan Stanley.
The Company was formed as a Delaware limited liability company on May 30, 2019 and, effective November 25, 2019, converted to a Delaware corporation. The Company commenced investing operations in January 2020. The Company has delegated the right to manage the assets of the Company to MS Capital Partners Adviser Inc., as the investment adviser to the Company (the “Adviser” or “Investment Adviser”). The Investment Adviser is an indirect, wholly owned subsidiary of Morgan Stanley.
The Company’s investment objective is to achieve attractive risk-adjusted returns via current income and, to a lesser extent, capital appreciation by investing primarily in directly originated senior secured term loans issued by U.S. middle-market companies backed by financial sponsors.
The Company is conducting private offerings of its common stock of the Company, par value $0.001 per share (the “Common Stock”), to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At the closing of any private offering, each investor makes a capital commitment (a “Capital Commitment”) to purchase shares of Common Stock pursuant to a subscription agreement entered into with the Company. Investors are required to fund drawdowns to purchase shares of Common Stock up to the amount of their respective Capital Commitments each time the Company delivers a notice to the investors.
The Company has formed wholly-owned subsidiaries for the purpose of holding certain investments in portfolio companies made by the Company. As of June 30, 2022, the Company’s wholly-owned subsidiaries were formed as Delaware limited liability companies and included: DLF CA SPV LLC (“CA SPV”), DLF SPV LLC (“DLF SPV”), DLF Financing SPV LLC (“DLF LLC”) and DLF Equity Holdings LLC (“DLF Equity Holdings,” and collectively with CA SPV, DLF SPV and DLF LLC, the “subsidiaries”). The Company consolidates its wholly-owned subsidiaries in these consolidated financing statements from the date of the respective subsidiary’s formation.
44
(2)Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”) issued by the Financial Accounting Standards Board (“FASB”). The carrying value for all assets and liabilities approximates their fair value.
The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the interim period presented, have been included. The current period’s results of operations will not necessarily be indicative of results that the Company may ultimately achieve for the year ending December 31, 2022.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Such amounts could differ from those estimates and such differences could be material. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. Assumptions and estimates regarding the valuation of investments involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements.
Consolidation
As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company’s wholly-owned subsidiaries in its consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.
Cash
Cash is carried at cost, which approximates fair value. The Company deposits its cash with multiple financial institutions and, at times, may exceed the Federal Deposit Insurance Corporation insured limit.
Foreign Currency Translation
The functional currency of the Company is the U.S. Dollar. Investments denominated in foreign currencies are translated into U.S. Dollars based upon currency exchange rates effective on the last business day of the current reporting period. Net changes in fair value of investments due to foreign exchange rates fluctuation is recorded as change in unrealized appreciation (depreciation) from foreign currency translation on the Consolidated Statements of Operations. Investment and non-investment activities denominated in foreign currencies, including purchase and sales of investments, borrowings and repayments of debt, income and expenses, are translated into U.S. dollars based upon currency exchange rates prevailing on the transaction dates.
Investments
Investment transactions are recorded on the trade date. Receivables/payables from investments sold/purchased on the Consolidated Statements of Assets and Liabilities consist of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date. Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
The Company’s board of directors (the “Board of Directors”), with the assistance of the Company’s audit committee (the “Audit Committee”), determines the fair value of the Company’s investments in accordance with ASC Topic 820, Fair Value Measurements (“ASC 820”) issued by FASB. ASC 820 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value is a market-based measurement, not an entity-specific measurement. For some investments, observable market transactions or market information might be available. For other investments, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same—to estimate the price when an orderly transaction to sell the investment would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant. Refer to Note 5 for our framework for determining fair value, fair value hierarchies, and the composition of our portfolio.
45
Revenue Recognition
Interest Income
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective investment using the effective interest method. The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Upon prepayment of a loan or debt investment, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period.
PIK Income
The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in PIK income on the Consolidated Statements of Operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through PIK income. This non-cash source of income is included when determining what must be paid out to stockholders in the form of distributions in order for the Company to maintain its status as a RIC, even though the Company has not yet collected cash.
Dividend income
Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies. Dividend income is presented net of withholding tax, if any.
Other Income
The Company may receive various fees in the ordinary course of business such as structuring, consent, waiver, amendment and syndication fees as well as fees for managerial assistance rendered by the Company to the portfolio companies. Such fees are recognized in income when earned or when the services are rendered and there is no uncertainty or contingency related to the amount to be received.
Non-Accrual Income
Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.
Organization and Offering Costs
Costs associated with the organization of the Company are expensed as incurred, subject to the limitations discussed in Note 3. These costs consist primarily of legal fees and other costs of organizing the Company. Costs associated with the offering of Common Stock are capitalized as “deferred offering costs” on the Consolidated Statements of Assets and Liabilities and amortized over a twelve-month period from the initial capital call, subject to the limitation described in Note 3 below. These costs consist primarily of legal fees and other costs incurred in connection with the Company’s continuous private offerings of its Common Stock.
Expenses
The Company is responsible for investment expenses, professional fees and other general and administrative expenses related to the Company’s operations. Such fees and expenses, including expenses incurred by the Adviser on behalf of the Company, will be reimbursed by the Company, subject to contractual thresholds.
The Company pays the Investment Adviser a base management fee and an incentive fee under the Investment Advisory Agreement between the Company and the Investment Adviser (the “Investment Advisory Agreement”) as described in Note 3 below. The fees are recorded on the Consolidated Statements of Operations.
Deferred Financing Costs and Debt Issuance Costs
The Company records upfront fees, legal and other direct costs incurred in connection with the Company’s issuance of revolving debt facilities as Deferred Financing Costs. These costs are deferred and amortized over the life of the related revolving credit facilities using the straight-line method. Deferred financing costs related to revolving credit facilities are presented separately as an asset on the
46
Company’s Consolidated Statements of Assets and Liabilities. The amortization of such Deferred Financing Costs are presented on the Consolidated Statements of Operations as interest expense and other financing expenses.
The Company records costs related to the issuance of term debt obligations (“Debt Issuance Costs”) on the consolidated financial statements. The costs, including upfront fees, legal and other direct costs incurred in connection with the issuance are deferred and amortized over the life of the related term obligation using the straight-line method. The amortization of Debt Issuance Costs are presented on the Consolidated Statements of Operations as interest expense and other financing expenses. Any unamortized Debt Issuance Costs are presented as a reduction to the outstanding term debt principal amount on the Consolidated Statements of Assets and Liabilities.
Income Taxes
The Company has elected to be treated as a RIC under Subchapter M of the Code. So long as the Company maintains its status as a RIC, it generally will not pay corporate U.S. federal income taxes on any ordinary income or capital gains that it distributes, at least annually, to its stockholders as dividends.
In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (the “ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.    
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.    
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.
For the three and six months ended June 30, 2022, the Company did not incur any U.S. federal excise tax. For the three and six months ended June 30, 2021, the Company accrued $— and $5 of U.S. federal excise tax, respectively.
New Accounting Standards
In March 2020, FASB issued Accounting Standards Update 2020-04 (“ASU 2020-04”) “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This accounting update provides optional accounting relief to entities with contracts, hedge accounting relationships or other transactions that reference LIBOR or other interest rate benchmarks for which the referenced rate is expected to be discontinued or replaced. This optional relief generally allows for contract modifications solely related to the replacement of the reference rate to be accounted for as a continuation of the existing contract instead of as an extinguishment of the contract and would therefore not trigger certain accounting impacts that would otherwise be required. The optional relief can be applied beginning January 1, 2020 and ending December 31, 2022. The Company adopted the accounting relief on January 1, 2022 and noted no material impact on the consolidated financial statements, as relevant contract relationship modifications are made during the course of the reference rate reform transition period.
(3)Related Party Transactions
Investment Advisory Agreement
On November 25, 2019, the Company entered into the Investment Advisory Agreement. The Investment Advisory Agreement had an initial term of two years and continues thereafter from year to year if approved annually by the Board of Directors or our stockholders, including, in each case, a majority of the Independent Directors. The renewal of the Investment Advisory Agreement was most recently approved in August 2022.
The Company pays the Investment Adviser a fee for its services under the Investment Advisory Agreement consisting of two components: a base management fee (the “Base Management Fee”) and an incentive fee. The cost of both the Base Management Fee and the incentive fee will ultimately be borne by the stockholders.
Base Management Fee
47
The Base Management Fee is calculated at an annual rate of 1.0% of the Company’s average gross assets at the end of the two most recently completed calendar quarters, including assets purchased with borrowed funds or other forms of leverage but excluding cash and cash equivalents. Prior to a listing of the Common Stock on a national securities exchange, the Adviser has agreed to irrevocably waive the portion of the Base Management Fee in excess of 0.25% of the Company’s average gross assets calculated in accordance with the Investment Advisory Agreement. Any Base Management Fees so waived are not subject to recoupment by the Adviser. The Base Management Fee is payable quarterly in arrears, and no management fee is charged on committed but undrawn Capital Commitments.
For the three and six months ended June 30, 2022, Base Management Fees were $1,634 and $3,179 net of waiver, respectively. For the three and six months ended June 30, 2021, Base Management Fees were $701 and $1,193 net of waiver, respectively. As of June 30, 2022 and December 31, 2021, $1,634 and $1,306 were payable to the Investment Adviser relating to Base Management Fees.
Incentive Fee
The incentive fee consists of two components that are determined independently of each other, with the result that one component may be payable even if the other is not. One component is based on income and the other component is based on capital gains.
The Company pays its Adviser an income based incentive fee with respect to the Company’s pre-incentive fee net investment income in each calendar quarter as follows:
•No income based incentive fee if the Company’s pre-incentive fee net investment income, expressed as a return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, does not exceed the hurdle rate of 1.5% (6.0% annualized);
•100% of the Company’s pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.8182% (7.2728% annualized). This portion of the pre-incentive fee net investment income (which exceeds the Hurdle Rate but is less than 1.8182%) is referred to as the “catch-up”. This “catch-up” portion is meant to provide the Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if the “catch up” is achieved; and
•17.5% of the Company’s pre-incentive fee net investment income, if any, that exceeds the rate of return of 1.8182% (7.2728% annualized)
The second part of the incentive fee is determined on realized capital gains calculated and payable in arrears in cash as of the end of each calendar year or upon the termination of the Investment Advisory Agreement in an amount equal to 17.5% of the realized capital gains, if any, on a cumulative basis from the date of the Company's election to be regulated as a BDC through the end of a given calendar year or upon the termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees (the “Cumulative Capital Gains”).
Under U.S. GAAP, the Company is required to accrue an incentive fee on capital gains, including unrealized capital appreciation even though such unrealized capital appreciation is not included in calculating the incentive fee payable under the Investment Advisory Agreement. If such amount is positive at the end of a period, then the Company records an incentive fee on capital gain incentive fee equal to 17.5% of such amount, less the aggregate amount of any previously paid capital gain incentive fees. If such amount is negative, no accrual is recorded for such period.
For the three and six months ended June 30, 2022, $5,879 and $11,345 respectively, of income based incentive fees were accrued to the Investment Adviser. For the three and six months ended June 30, 2021, $3,540 and $5,846 respectively, of income based incentive fees were accrued to the Investment Adviser.
For the three and six months ended June 30, 2022, $1,694 and $2,441 of previously accrued capital gains incentive fees to the Investment Adviser were reversed due to changes in unrealized depreciation on investments during the respective period. For the three and six months ended June 30, 2021, $680 and $1,492 of capital gains incentive fees were accrued to the Investment Adviser. The Investment Advisory Agreement does not permit unrealized capital appreciation for purposes of calculating the amount payable to the Investment Adviser. Amounts due related to unrealized capital appreciation, if any, will not be paid to the Investment Adviser until realized under the terms of the Investment Advisory Agreement and determined based on the calculation. Incentive fees on Cumulative Capital Gains crystallize at calendar year-end.
As of June 30, 2022, $5,879 and $0 were payable to the Investment Adviser relating to income based incentive fees and capital gains incentive fees, respectively. As of December 31, 2021, $5,886 and $2,773 were payable to the Investment Adviser relating to income based incentive fees and capital gains incentive fees, respectively.
Administration Agreement
MS Private Credit Administrative Services LLC (the “Administrator”) is the administrator of the Company pursuant to an administration agreement (the “Administration Agreement”). The Administrator is an indirect, wholly owned subsidiary of Morgan Stanley.
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Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements from the Company equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of certain expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to the Company’s Chief Compliance Officer and Chief Financial Officer. Reimbursement under the Administration Agreement occurs quarterly in arrears. The Administration Agreement had an initial term of two years and continues thereafter from year to year if approved annually by our Board of Directors, which most recently approved the renewal of the Administration Agreement in August 2022.
For the three and six months ended June 30, 2022, the Company incurred $54 and $70, respectively, in expenses under the Administration Agreement, which were recorded in administrative service expenses on the Company’s Consolidated Statements of Operations. For the three and six months ended June 30, 2021, the Company incurred $54 and $104, respectively, in expenses under the Administration Agreement, which were recorded in administrative service expenses on the Company’s Consolidated Statements of Operations.
Amounts unpaid and included in payable to affiliates on the Consolidated Statements of Assets and Liabilities as of June 30, 2022 and December 31, 2021 were $108 and $266, respectively.
Expense Support and Waiver Agreement
On December 31, 2019, the Company entered into an expense support and waiver agreement (the “Expense Support and Waiver Agreement”) with the Investment Adviser. Under the terms of the Expense Support and Waiver Agreement, the Investment Adviser agreed to waive any reimbursement by the Company of offering and organizational expenses to be incurred by the Investment Adviser on behalf of the Company in excess of $1,000 or 0.10% of the aggregate Capital Commitments of the Company, whichever is greater. If actual organization and offering costs incurred exceed the greater of $1,000 or 0.10% of the Company’s total Capital Commitments, the Investment Adviser or its affiliate will bear the excess costs. The Company shall reimburse the Investment Adviser for payments of any excess costs borne by the Investment Adviser on the Company’s behalf within three years of December 23, 2019 (the “Initial Closing Date”).
For the three and six months ended June 30, 2022, the Company did not incur any organization costs. The Investment Adviser recaptured $0 and $39 of previously waived amounts from the Company since actual offering and organizational expenses incurred from May 30, 2019 (inception) as a result of additional closings of investor commitments. For the three and six months ended June 30, 2021, the Company incurred $3 and $42 towards organization cost and amortization of offering cost, and the Investment Adviser recaptured $86 and $97 of previously waived amounts from the Company.
As of June 30, 2022 and December 31, 2021, organization and offering costs are included in payable to affiliates and accrued expenses and other liabilities in the Consolidated Statements of Assets and Liabilities.
License Agreement
The Company entered into a license agreement with Morgan Stanley (the “License Agreement”) under which Morgan Stanley has granted the Company a non-exclusive, royalty-free license to use the name “Morgan Stanley” for specified purposes in the Company’s business. Under the License Agreement, the Company has a right to use the “Morgan Stanley” name, subject to certain conditions, for so long as the Investment Adviser or one of its affiliates remains the Company’s investment adviser. Other than with respect to this limited license, the Company has no legal right to the “Morgan Stanley” name.
Placement Agent Agreement
On August 30, 2019, the Company entered into a placement agent agreement (the “Placement Agent Agreement”) with Morgan Stanley Distribution Inc. (the “Paying Agent”), Morgan Stanley Smith Barney LLC (the “Placement Agent”) and the Investment Adviser. Under the terms of the Placement Agent Agreement, the Placement Agent and certain of its affiliates will assist in the placement of Common Stock in the Company’s private offerings. The Company is not liable for any payments to the Placement Agent pursuant to the Placement Agent Agreement. Payments are made by the Investment Adviser to the Placement Agent. To the extent the Paying Agent receives any payments it remits the payment to the Placement Agent.
MS Credit Partners Holdings, Inc. Investment
MS Credit Partners Holdings, Inc. (“MS Credit Partners Holdings”), an indirect, wholly owned subsidiary of Morgan Stanley and an affiliate of the Investment Adviser, made an aggregate capital commitment of $200,000 to the Company in 2019. As of June 30, 2022 and December 31, 2021, MS Credit Partners Holdings’ total uncalled capital commitment represented approximately 12% and 13% of aggregate uncalled capital commitments received, respectively.
Morgan Stanley & Co. LLC, a wholly owned subsidiary of Morgan Stanley and an affiliate of the Investment Adviser, served as an initial purchaser in connection with the private placement of the Company’s 2027 Notes (as defined below in Note 6) and received fees of $213 for the six months ended June 30, 2022 under the purchase agreement entered into by the Company in connection with such private placement.
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(4) Investments
The composition of the Company’s investment portfolio at cost and fair value was as follows:
June 30, 2022December 31, 2021
CostFair Value% of Total Investments at Fair ValueCostFair Value% of Total Investments at Fair Value
First Lien Debt$2,525,593 $2,500,321 93.2 %$2,213,332 $2,224,100 93.2 %
Second Lien Debt135,757 133,157 5.0 120,124 121,550 5.1 
Other Securities44,169 48,501 1.8 39,979 41,724 1.7 
Total$2,705,519 $2,681,979 100.0 %$2,373,435 $2,387,374 100.0 %
The industry composition of investments at fair value was as follows:
June 30, 2022December 31, 2021
Aerospace and Defense1.6 %1.7 %
Air Freight and Logistics0.6 0.5 
Auto Components3.1 3.3 
Automobiles5.2 7.4 
Biotechnology0.5 0.6 
Chemicals0.7 — 
Commercial Services & Supplies12.6 13.0 
Construction and Engineering1.4 1.5 
Containers & Packaging1.6 1.6 
Distributors2.9 1.2 
Diversified Consumer Services2.0 1.5 
Diversified Financial Services0.4 0.1 
Electronic Equipment, Instruments & Components0.6 0.7 
Energy Equipment & Services0.5 0.6 
Food Products2.7 3.1 
Health Care Equipment & Supplies0.3 0.4 
Health Care Providers & Services3.6 2.9 
Health Care Technology0.8 0.9 
Industrial Conglomerates1.6 1.8 
Insurance Services16.2 17.1 
Interactive Media & Services3.5 3.8 
IT Services10.3 10.8 
Leisure Products1.0 2.4 
Machinery1.9 2.0 
Multi-Utilities0.6 0.4 
Oil, Gas & Consumables Fuels— (1)— 
Professional Services2.6 4.0 
Real Estate Management & Development4.9 5.2 
Software16.2 11.5 
Total100.0 %100.0 %
(1) Amount rounds to 0.0%.
The geographic composition of investments at cost and fair value were as follows:
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June 30, 2022December 31, 2021
CostFair Value% of Total
Investments at
Fair Value		CostFair Value% of Total
Investments at
Fair Value
Australia$8,280 $8,280 0.3 %$— $— — %
Canada94,224 91,228 3.4 81,935 81,386 3.4 
United Kingdom17,834 18,036 0.7 17,804 18,200 0.8 
United States2,585,181 2,564,435 95.6 2,273,696 2,287,788 95.8 
Total$2,705,519 $2,681,979 100.0 %$2,373,435 $2,387,374 100.0 %
(5) Fair Value Measurements
ASC 820 establishes a hierarchical disclosure framework which ranks the observability of inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instruments and their specific characteristics. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, generally will have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
The three-level hierarchy for fair value measurements is defined as follows:
Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical financial instruments as of the measurement date. The types of financial instruments in this category include unrestricted securities, including equities and derivatives, listed in active markets. The Company will not adjust the quoted price for these instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
Level 2—inputs to the valuation methodology are quoted prices in markets that are not active or for which all significant inputs are either directly or indirectly observable as of the measurement date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in markets that are not active, and certain over-the-counter derivatives where the fair value is based on observable inputs.
Level 3—inputs to the valuation methodology are unobservable and significant to the overall fair value measurement, and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in this category include investments in privately held entities, non-investment grade residual interests in securitizations and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
Pursuant to the framework set forth above, the Company values securities traded in active markets on the measurement date by multiplying the exchange closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of the investments from pricing services, brokers or dealers’ quotes, or counterparty marks in order to value liquid assets that are not traded in active markets. Pricing services aggregate, evaluate and report pricing from a variety of sources including observed trades of identical or similar securities, broker or dealer quotes, model-based valuations and internal fundamental analysis and research. When doing so, the Company determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. If determined adequate, the Company uses the quote obtained.
Securities that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Board of Directors, does not represent fair value, each is valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment but include comparable public market valuations, comparable precedent transaction valuations and discounted cash flow analyses. Non-controlled debt investments are generally fair valued using discounted cash flow technique. Expected cash flows are projected based on contractual terms and discounted back to the measurement date based on a discount rate. Discount rate is determined based upon an assessment of current and expected yields for similar investments and risk profiles. Non-controlled equity investments are generally fair valued using a market approach and/or an income approach. The market approach typically utilizes market value multiples of comparable publicly traded companies. The income approach typically utilizes a discounted cash flow analysis of the portfolio company. The Board of Directors undertakes a multi-step valuation process each quarter, as described below:
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1)each portfolio company or investment is initially valued by using a standardized template designed to approximate fair market value based on observable market inputs and updated credit statistics and unobservable inputs;
2)preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of the Investment Adviser’s senior management;
3)the Board of Directors engages independent third-party valuation firms to provide positive assurance on a portion of the Company’s illiquid investments each quarter (such that each illiquid investment will be reviewed by an independent valuation firm at least once on a rolling twelve month basis) including review of management’s preliminary valuation and conclusion of fair value;
4)the Audit Committee reviews the assessments of the Investment Adviser and the independent third-party valuation firm and provide the Board of Directors with recommendations with respect to the fair value of each investment in the Company’s portfolio; and
5)the Board of Directors discusses the valuation recommendations of the Audit Committee and determine the fair value of each investment in the Company’s portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.
The fair value is generally determined based on the assessment of the following factors, as relevant:
•     the nature and realizable value of any collateral;
•     call features, put features and other relevant terms of debt;
•     the portfolio company’s leverage and ability to make payments;
•     the portfolio company’s public or “private letter” credit ratings;
•     the portfolio company’s actual and expected earnings and discounted cash flow;
•     prevailing interest rates for like securities and expected volatility in future interest rates;
•     the markets in which the issuer does business and recent economic and/or market events; and
•     comparisons to publicly traded securities.
Investment performance data utilized will be the most recently available as of the measurement date which in many cases may reflect up to a one quarter lag in information.
The Board of Directors is ultimately responsible for the determination, in good faith, of the fair value of the Company’s portfolio investments.
Transfer of portfolio investments within the three-level hierarchy is recorded during the period of such reclassification occurrence at the fair value as of the beginning of the respective period. Generally, reclassifications are primarily due to increase/decrease of price transparency.
The following tables present the fair value hierarchy of investments:
June 30, 2022
Level 1Level 2Level 3Total
First Lien Debt$— $7,353 $2,492,968 $2,500,321 
Second Lien Debt— 16,669 116,488 133,157 
Other Securities— — 32,898 32,898 
Subtotal$— $24,022 $2,642,354 $2,666,376 
Investment measured at net asset value(1)
15,603 
Total$2,681,979 
December 31, 2021
Level 1Level 2Level 3Total
First Lien Debt$— $17,064 $2,207,036 $2,224,100 
Second Lien Debt— — 121,550 121,550 
Other Securities— — 27,973 27,973 
Subtotal$— $17,064 $2,356,559 $2,373,623 
Investment measured at net asset value(1)
13,751 
Total$2,387,374 
(1) The Company, as a practical expedient, estimates the fair value of its investment in Help HP SCF Investor, LP using the net asset value of the Company’s member’s interest in the entity. As such, the fair value has not been classified within the fair value hierarchy.
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The following table presents changes in the fair value of the investments for which Level 3 inputs were used to determine the fair value for the three months ended June 30, 2022:
First Lien DebtSecond Lien DebtOther SecuritiesTotal Investments
Fair value, beginning of period$2,352,558 $113,929 $28,476 $2,494,963 
Purchases of investments384,074 4,753 3,792 392,619 
Proceeds from principal repayments and sales of investments(216,608)— — (216,608)
Accretion of discount/amortization of premium3,236 83 — 3,319 
Payment-in-kind295 125 381 801 
Net change in unrealized appreciation (depreciation)(31,071)(2,383)249 (33,205)
Net realized gains (losses)484 (19)— 465 
Transfers into/(out) of Level 3— — — — 
Fair value, end of period$2,492,968 $116,488 $32,898 $2,642,354 
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2022$(29,896)$(2,383)$249 $(32,030)
The following table presents changes in the fair value of the investments for which Level 3 inputs were used to determine the fair value for the six months ended June 30, 2022:
First Lien DebtSecond Lien DebtOther SecuritiesTotal Investments
Fair value, beginning of period$2,207,036 $121,550 $27,973 $2,356,559 
Purchases of investments551,300 15,233 3,792 570,325 
Proceeds from principal repayments and sales of investments(236,922)— — (236,922)
Accretion of discount/amortization of premium5,134 160 — 5,294 
Payment-in-kind515 259 397 1,171 
Net change in unrealized appreciation (depreciation)(34,609)(3,195)736 (37,068)
Net realized gains (losses)514 (19)— 495 
Transfers into/(out) of Level 3— (17,500)— (17,500)
Fair value, end of period$2,492,968 $116,488 $32,898 $2,642,354 
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2022$(34,226)$(3,175)$736 $(36,665)
The following table presents changes in the fair value of the investments for which Level 3 inputs were used to determine the fair value for the three months ended June 30, 2021:
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First Lien DebtSecond Lien DebtOther SecuritiesTotal Investments
Fair value, beginning of period$822,006 $93,071 $9,147 $924,224 
Purchases of investments451,530 36,880 6,379 494,789 
Proceeds from principal repayments and sales of investments(103,179)(5,000)— (108,179)
Accretion of discount/amortization of premium2,671 148 — 2,819 
Payment-in-kind— 125 188 313 
Net change in unrealized appreciation (depreciation)2,674 963 608 4,245 
Net realized gains (losses)(6)— — (6)
Transfers into/(out) of Level 3— 3,864 — 3,864 
Fair value, end of period$1,175,696 $130,051 $16,322 $1,322,069 
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2021$4,423 $1,056 $608 $6,087 
The following table presents changes in the fair value of the investments for which Level 3 inputs were used to determine the fair value for the six months ended June 30, 2021:
First Lien DebtSecond Lien DebtOther SecuritiesTotal Investments
Fair value, beginning of period$558,318 $53,155 $2,959 $614,432 
Purchases of investments740,584 89,398 12,235 842,217 
Proceeds from principal repayments and sales of investments(135,658)(15,000)— (150,658)
Accretion of discount/amortization of premium3,494 581 — 4,075 
Payment-in-kind— 253 250 503 
Net change in unrealized appreciation (depreciation)6,115 1,664 878 8,657 
Net realized gains (losses)(6)— — (6)
Transfers into/(out) of Level 32,849 — — 2,849 
Fair value, end of period$1,175,696 $130,051 $16,322 $1,322,069 
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2021$7,341 $1,664 $878 $9,883 
The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value.
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June 30, 2022
Range
Fair
Value		Valuation TechniqueUnobservable
Input		LowHighWeighted
Average
Investments in first lien debt$2,492,968 Yield AnalysisDiscount Rate7.70 %18.16 %9.74 %
Investments in second lien debt116,488 Yield AnalysisDiscount Rate10.00 %14.22 %11.96 %
Investments in other securities:
  Unsecured debt523 Market ApproachEBITDA Multiple9.00x9.00x9.00x
  Preferred equity14,232 Income ApproachDiscount Rate11.68 %14.80 %12.44 %
1,363 Market ApproachRevenue Multiple11.80x11.80x11.80x
  Common equity15,560 Market ApproachEBITDA Multiple8.10x19.62x13.51x
1,220 Market ApproachRevenue Multiple10.40x10.40x10.40x
Total investments in other securities32,898 
Total Investments$2,642,354 
December 31, 2021
Range
Fair
Value		Valuation TechniqueUnobservable
Input		LowHighWeighted
Average
Investments in first lien debt$2,207,036 Yield AnalysisDiscount Rate5.55 %12.44 %7.52 %
Investments in second lien debt121,550 Yield AnalysisDiscount Rate7.12 %10.79 %8.51 %
Investments in other securities:
  Unsecured debt1,350 Yield AnalysisDiscount Rate25.33 %25.33 %25.33 %
Market ApproachEBITDA Multiple9.00x9.00x9.00x
  Preferred equity9,950 Yield AnalysisDiscount Rate11.70 %12.10 %11.92 %
1,298 Market ApproachRevenue Multiple11.80x11.80x11.80x
  Common equity15,375 Market ApproachEBITDA Multiple8.10x19.97x13.11x
Total investments in other securities27,973 
Total Investments$2,356,559 
The significant unobservable input used in yield analysis is discount rate based on comparable market yields. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. The significant unobservable input used in the market approach is the comparable company multiple. The multiple is used to estimate the enterprise value of the underlying investment. An increase/decrease in the multiple would result in an increase/decrease, respectively, in the fair value.
The carrying amounts of the Company’s assets and liabilities, other than investments at fair value and debt, approximate fair value.
Financial instruments disclosed but not carried at fair value
The Company’s debt, including its credit facilities and 2027 Notes (as defined below in Note 6), are presented at carrying costs on the Consolidated Statements of Assets and Liabilities. The fair value of the Company’s 2027 Notes is based on vendor pricing received by the Company, which is categorized as Level 2 within the fair value hierarchy, and as of June 30, 2022, the fair value of the Company’s 2027 Notes was $383,095. The fair value of the Company’s credit facilities are estimated using Level 3 inputs by discounting remaining payments using the appropriate discount rates, if available. The carrying value and fair value of the Company’s debt were as follows:
June 30, 2022December 31, 2021
Carrying ValueFair ValueCarrying ValueFair Value
CIBC Subscription Facility$275,350 $275,350 $310,350 $310,350 
BNP Funding Facility405,500 405,500 463,500 463,500 
Truist Credit Facility377,000 377,000 476,000 476,000 
2027 Notes(1)
418,894 383,095 — — 
Total$1,476,744 $1,440,945 $1,249,850 $1,249,850 
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(1) The carrying value of the Company’s 2027 Notes is presented net of unamortized debt issuance costs of $5,117 and unamortized original issuance discount of $989.
(6)Debt
CIBC Subscription Facility
On December 31, 2019, the Company entered into a revolving credit agreement with CIBC Bank USA as administrative agent and arranger, which was subsequently amended on February 3, 2020, November 17, 2020, January 18, 2022 and February 3, 2022 (as amended, the “CIBC Subscription Facility”). The maximum revolving commitment of CIBC Subscription Facility was permanently reduced to $280,000 effective May 12, 2022. The CIBC Subscription Facility allows the Company to borrow up to the maximum revolving commitment at any one time outstanding, subject to certain restrictions, including availability under the borrowing base, which is based on unused Capital Commitments. The CIBC Subscription Facility bears interest at a rate at the Company’s election of either (i) the per annum one or three-month LIBOR, divided by a number determined by subtracting from 1.00 the then stated maximum reserve percentage for determining reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency funding or liabilities, plus 1.65% or (ii) the prime rate plus 0.65%, as calculated under the CIBC Subscription Facility. The CIBC Subscription Facility is secured by the unfunded commitments of certain stockholders of the Company. The CIBC Subscription Facility has a maturity date of December 31, 2022.
The summary information of the CIBC Subscription Facility is as follows:
For the Three Months EndedFor the Six Months Ended
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Borrowing interest expense$1,779 $1,512 $3,179 $3,152 
Facility unused commitment fees2 32 13 49 
Amortization of deferred financing costs288 342 798 675 
Total$2,069 $1,886 $3,990 $3,876 
Weighted average interest rate (excluding unused fees and financing costs)2.40 %1.78 %2.10 %1.79 %
Weighted average outstanding balance$292,658 $335,839 $301,455 $350,795 
For the three months ended June 30, 2022 and June 30, 2021, the Company borrowed $— and $124,000, and repaid $35,000 and $153,000, respectively, under the CIBC Subscription Facility. For the six months ended June 30, 2022 and June 30, 2021, the Company borrowed $— and $215,000, and repaid $35,000 and $200,000, respectively, under the CIBC Subscription Facility. As of June 30, 2022 and December 31, 2021, the Company had $275,350 and $310,350 outstanding under the CIBC Subscription Facility, respectively. As of June 30, 2022 and December 31, 2021, the Company had $4,650 and $89,650, respectively, of available capacity under the CIBC Subscription Facility (subject to borrowing base restrictions).
BNP Funding Facility
On October 14, 2020, DLF LLC entered into a Revolving Credit and Security Agreement (the “Credit and Security Agreement”, which was subsequently amended on December 11, 2020 and March 2, 2021) with DLF LLC, as the borrower, BNP Paribas (“BNP”), as the administrative agent and lender, the Company, as the equity holder and as the servicer, and U.S. Bank National Association, as collateral agent to (as amended, the “BNP Funding Facility”). As of June 30, 2022, the borrowing capacity under the BNP Funding Facility was $600,000. The applicable margin on borrowings during the reinvestment period ranges between 1.95% and 2.75% and, after the reinvestment period, between 2.45% and 3.25%. The obligations of DLF LLC under the BNP Funding Facility are secured by the assets held by DLF LLC. The BNP Funding Facility has a maturity date of October 13, 2025.
The summary information of the BNP Funding Facility is as follows:
For the Three Months EndedFor the Six Months Ended
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Borrowing interest expense$3,318 $2,021 $6,148 $2,571 
Facility unused commitment fees66 25 81 35 
Amortization of deferred financing costs286 286 566 494 
Total$3,670 $2,332 $6,795 $3,100 
Weighted average interest rate (excluding unused fees and financing costs)3.14 %2.48 %2.82 %2.52 %
Weighted average outstanding balance$417,324 $322,637 $433,323 $202,983 
For the three months ended June 30, 2022 and June 30, 2021, the Company borrowed $13,000 and $174,500, and repaid $43,000 and $18,000 under the BNP Funding Facility, respectively. For the six months ended June 30, 2022 and June 30, 2021, the Company
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borrowed $13,000 and $389,000, and repaid $71,000 and $18,000 under the BNP Funding Facility, respectively. As of June 30, 2022 and December 31, 2021, the Company had $405,500 and $463,500 outstanding under the BNP Funding Facility, respectively. As of June 30, 2022 and December 31, 2021, the Company had $194,500 and $136,500, respectively, of available capacity under the BNP Funding Facility (subject to borrowing base restrictions).
Truist Credit Facility
On July 16, 2021, the Company entered into a Senior Secured Revolving Credit Agreement with Truist Bank, as amended on December 3, 2021 and May 20, 2022 (the “Truist Credit Facility”). The maximum principal amount of the Truist Credit Facility is $975,000, subject to availability under the borrowing base. The Truist Credit Facility includes an uncommitted accordion feature that allows the Company, under certain circumstances, to increase the borrowing capacity to up to $1,000,000. The availability period of the Truist Credit Facility will terminate on July 16, 2025. The Truist Credit Facility is guaranteed by certain domestic subsidiaries of the Company (the “Guarantors”). The Company’s obligations to the lenders under the Truist Credit Facility are secured by a first priority security interest in substantially all of the assets of the Company and each Guarantor, subject to certain exceptions.
The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Borrowings under the Truist Credit Facility bear interest at a per annum rate equal to, (x) for loans for which the Company elects the base rate option, the “alternate base rate” (which is the highest of (a) the prime rate as publicly announced by Truist Bank, (b) the sum of (i) the weighted average of the rates on overnight federal funds transactions, as published by the Federal Reserve Bank of New York plus (ii) 0.5%, and (c) one month LIBOR plus 1% per annum) plus either (A) 0.75% or (B) 0.875%, based on certain borrowing base conditions, and (y) for loans for which the Company elects the Eurocurrency option, the applicable LIBO Rate for the related Interest Period for such Borrowing plus either (A) 1.75% per annum, or (B) 1.875% per annum, based on certain borrowing base conditions. The Company pays an unused fee of 0.375% per annum on the daily unused amount of the revolver commitments. The Truist Credit Facility has a maturity date of July 16, 2026.
The summary information of the Truist Credit Facility is as follows:
For the Three Months Ended June 30, 2022For the Six Months Ended June 30, 2022
Borrowing interest expense$1,948 $3,467 
Facility unused commitment fees666 1,305 
Amortization of deferred financing costs318 638 
Total$2,932 $5,410 
Weighted average interest rate (excluding unused fees and financing costs)2.72 %2.37 %
Weighted average outstanding balance$283,423 $290,254 
For the three months ended June 30, 2022, the Company borrowed $321,500 and repaid $136,000 under the Truist Credit Facility. For the six months ended June 30, 2022, the Company borrowed $452,000 and repaid $551,000 under the Truist Credit Facility. As of June 30, 2022 and December 31, 2021, the Company had $377,000 and $476,000 outstanding under the Truist Credit Facility, respectively. As of June 30, 2022 and December 31, 2021, the Company had $596,875 and $499,000, respectively, of available capacity under the Truist Credit Facility (subject to borrowing base restrictions).
Unsecured Notes
2027 Notes
On February 11, 2022, the Company issued $425,000 in aggregate principal amount of 4.50% notes due 2027 (the “2027 Notes”). The 2027 Notes will mature on February 11, 2027 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the indenture governing the 2027 Notes. The 2027 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2027 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities. The 2027 Notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act.
The summary information of 2027 Notes was as follows:
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For the Three Months Ended March 31, 2022For the Six Months Ended June 30, 2022
Borrowing interest expense$4,781 $7,438 
Accretion of original issuance discount54 82 
Amortization of debt issuance costs276 425 
Total$5,111 $7,945 
Stated interest rate4.50 %4.50 %
The Company’s debt obligations were as follows. Unused debt capacity of credit facilities were subject to certain borrowing base restrictions:
June 30, 2022December 31, 2021
Aggregate Principal CommittedOutstanding PrincipalUnused PortionAggregate Principal CommittedOutstanding PrincipalUnused Portion
CIBC Subscription Facility$280,000 $275,350 $4,650 $400,000 $310,350 $89,650 
BNP Funding Facility600,000 405,500 194,500 600,000 463,500 136,500 
Truist Credit Facility(1)
975,000 377,000 596,875 975,000 476,000 499,000 
2027 Notes425,000 425,000 — — — — 
Total$2,280,000 $1,482,850 $796,025 $1,975,000 $1,249,850 $725,150 
(1) As of June 30, 2022, a letter of credit of $1,125 was issued and outstanding, which reduced the unused availability under the Truist Credit Facility by the same amount.
The combined weighted average interest rate of the aggregate borrowings outstanding for the three months ended June 30, 2022 and June 30, 2021 was 3.30% and 2.12%, respectively. The combined weighted average debt of the aggregate borrowings outstanding for the three months ended June 30, 2022 and June 30, 2021 was $1,418,405 and $658,476, respectively.
The combined weighted average interest rate of the aggregate borrowings outstanding for the six months ended June 30, 2022 and June 30, 2021 was 2.77% and 2.08%, respectively. The combined weighted average debt of the aggregate borrowings outstanding for the six months ended June 30, 2022 and June 30, 2021 was $1,450,032 and $553,819, respectively.
As of June 30, 2022 and December 31, 2021, the Company was in compliance with all covenants and other requirements of each of the credit facilities and the 2027 Notes.
(7)Commitments and Contingencies
In the normal course of business, the Company may enter into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.
As of June 30, 2022, the Company had $395,847 unfunded commitments to fund delayed draw and revolving senior secured loans. As of December 31, 2021, the Company had $509,403 unfunded commitments to fund delayed draw and revolving senior secured loans.
As of June 30, 2022 and December 31, 2021, the Company had $1,625,731 and $1,585,531, respectively, in total capital commitments from stockholders, of which $391,029 and $425,694, respectively, were unfunded.
(8)Net Assets
The following table shows the components of distributable earnings as shown on the Consolidated Statements of Assets and Liabilities:
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As of
June 30, 2022December 31, 2021
Net distributable earnings (accumulated losses), beginning of period$15,782 $4,702 
Net investment income/(loss) after taxes55,924 72,929 
Accumulated realized gain (loss)538 1,895 
Net unrealized appreciation (depreciation)(37,479)8,431 
Dividends declared(56,056)(72,315)
Tax reclassification of stockholders’ equity— 140 
Net distributable earnings (accumulated losses), end of period$(21,291)$15,782 
The following table summarizes the total shares issued and proceeds received from the Company’s capital drawdowns delivered pursuant to the Subscription Agreements for the six months ended June 30, 2022 (dollar amounts in millions):
Share Issuance DateShares IssuedAmount
May 16, 20223,548,132 $74.9 
Total3,548,132 $74.9 
The following table summarizes the total shares issued and proceeds received from the Company’s capital drawdowns delivered pursuant to the Subscription Agreements for the six months ended June 30, 2021 (dollar amounts in millions):
Share Issuance DateShares IssuedAmount
January 20, 20211,726,689 $35.0 
March 12, 20212,171,816 45.0 
April 12, 20215,326,877 110.0 
May 26, 20214,036,582 85.0 
Total13,261,964 $275.0 
The following table summarizes the Company’s distributions declared and payable for the six months ended June 30, 2022:
Date DeclaredRecord DatePayment DatePer Share AmountTotal Amount
March 25, 2022March 25, 2022April 27, 2022$0.48 $27,455 
June 24, 2022June 24, 2022July 27, 20220.47 28,601 
Total Distributions$0.95 $56,056 

The following table summarizes the Company’s distributions declared and payable for the six months ended June 30, 2021:
Date DeclaredRecord DatePayment DatePer Share AmountTotal Amount
March 18, 2021March 18, 2021April 22, 2021$0.45 $8,570 
June 23, 2021June 23, 2021July 22, 20210.49 13,974 
Total Distributions$0.94 $22,544 
The Company adopted an “opt in” dividend reinvestment plan, or the DRIP. As a result, the Company’s stockholders who elect to “opt in” to the DRIP will have their cash dividends or distributions automatically reinvested in additional shares of Common Stock, rather than receiving cash. Stockholders who receive distributions in the form of shares of Common Stock will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, those stockholders will not receive cash with which to pay any applicable taxes. Shares issued under the DRIP will not reduce an investor’s outstanding capital commitment.
The following table summarizes the DRIP shares issued to stockholders who have “opted in” to the DRIP for the six months ended June 30, 2022 and the value of such shares as of the payment dates:
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Payment DateDRIP Shares ValueDRIP Shares Issued
January 25, 2022$7,540 358,891 
April 27, 20226,964 332,212 
Total$14,504 691,103 
The following table summarizes the DRIP shares issued to stockholders who have “opted in” to the DRIP for the six months ended June 30, 2021 and the value of such shares as of the payment dates:
Payment DateDRIP Shares ValueDRIP Shares Issued
January 27, 2021$2,462 121,484 
April 22, 20212,276 110,191 
Total$4,738 231,675 
(9)Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
For the Three Months EndedFor the Six Months Ended
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Numerator - net increase/(decrease) in net assets resulting from operations$(3,263)$19,898 $18,983 $34,599 
Denominator - weighted average shares outstanding59,227,774 25,409,035 58,170,368 21,205,672 
Basic and diluted earnings per share$(0.06)$0.78 $0.33 $1.63 
(10)Consolidated Financial Highlights
The following are the financial highlights (dollar amounts in thousands, except per share amounts):
For the Six Months Ended
 June 30, 2022June 30, 2021
Per Share Data:(1)
Net asset value, beginning of period$20.91 $20.08 
Net investment income (loss)
0.96 1.23 
Net unrealized and realized gain (loss)(2)
(0.61)0.40 
Net increase (decrease) in net assets resulting from operations0.35 1.63 
Dividends declared(0.95)(0.94)
Issuance of common stock0.01 0.04 
Total increase (decrease) in net assets(0.59)0.73 
Net asset value, end of period$20.32 $20.81 
Shares outstanding, end of period61,077,262 28,518,064 
Total return based on net asset value(3)
1.69 %8.37 %
Ratio/Supplemental Data (all amounts in thousands except ratios):
Net assets, end of period$1,240,884 $593,383 
Weighted average shares outstanding58,170,368 21,205,672 
Ratio of net expenses to average net assets(4)
5.58 %6.05 %
Ratio of expenses before waivers to average net assets(4)
7.14 %7.58 %
Ratio of net investment income to average net assets(4)
9.95 %12.97 %
Asset coverage ratio183.62 %182.43 %
Portfolio turnover rate9.71 %17.69 %
(1)The per share data was derived by using the weighted average shares outstanding during the period.
(2)For the six months ended June 30, 2022 and June 30, 2021, the amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions.
(3)Total return (not annualized) is calculated assuming a purchase of common stock at the opening of the first day of the period and a sale on the closing of the last business day of the period. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Company’s dividend reinvestment plan.
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(4)Amounts are annualized except for incentive fees, and expense support amounts relating to organization and offering costs.
(11) Subsequent Events
Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.
On July 18 2022, the Company delivered a capital drawdown notice to its stockholders relating to the sale of approximately 3,911,980 shares of the Company’s Common Stock for an aggregate offering price of $80 million. The sale closed on July 28, 2022.
Pursuant to a Registration Statement on Form N-14 (File No. 333-264774), on July 20, 2022, the Company closed an exchange offer in which holders of the 2027 Notes that were restricted because they were issued in a private placement were offered the opportunity to exchange such notes for new, registered notes with substantially identical terms. Through this exchange offer, holders representing 85.87% of the outstanding principal of the then restricted 2027 Notes obtained registered, unrestricted 2027 Notes.
The Company, as borrower, provided written notice (the “Commitment Reduction Notice”) of its intent to reduce the amount of the revolving commitment to $235,000 from $280,000 in accordance with and as permitted under the CIBC Subscription Facility. The other terms of the CIBC Subscription Facility were not changed. Such reduction in the revolving commitment under the CIBC Subscription Facility pursuant to the Commitment Reduction Notice was effective as of July 28, 2022.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except per share amounts, unless otherwise indicated)
In this Quarterly Report on Form 10-Q, or this “Report”, except where context suggests otherwise, the terms “Company,” “we,” “our” or “us” refers to Morgan Stanley Direct Lending Fund and its consolidated subsidiaries. This Report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and you should not place undue reliance on such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs and opinions and our assumptions. For the avoidance of doubt, we are not a subsidiary of, or consolidated with, Morgan Stanley. Furthermore, Morgan Stanley has no obligation, contractual or otherwise, to financially support us beyond the aggregate capital commitment to purchase shares of our common stock pursuant to a subscription agreement entered into by MS Credit Partners Holdings, Inc. described below. Morgan Stanley has no history of financially supporting any business development companies (“BDCs”) on the MS Private Credit platform, even during periods of financial distress. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “potential,” “predicts,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including:
•our future operating results;
•our business prospects and the prospects of our portfolio companies;
•risk associated with possible disruptions in our operations or the economy generally, including disruptions from the impact of the current Coronavirus (also referred to as “COVID-19” or “Coronavirus”) pandemic;
•changes in the general interest rate environment;
•general economic, political and industry trends and other external factors, including uncertainty surrounding the financial and political stability of the United States and other countries;
•the effect of an inflationary economic environment on our portfolio companies, our financial condition and our results of operations;
•our contractual arrangements and relationships with third parties;
•actual and potential conflicts of interest with MS Capital Partners Adviser Inc., our investment adviser (the “Adviser” or the “Investment Adviser”), and its affiliates;
•the dependence of our future success on the general economy and its effect on the industries in which we invest;
•the ability of our portfolio companies to achieve their objectives, including as a result of the Coronavirus pandemic;
•the use of borrowed money to finance a portion of our investments;
•the adequacy of our financing sources and working capital;
•the timing and amount of cash flows, if any, from the operations of our portfolio companies;
•the ability of our Investment Adviser to locate suitable investments for us and to monitor and administer our investments;
•the ability of our Investment Adviser and its affiliates to attract and retain highly talented professionals;
•our ability to maintain our qualification as a BDC, and as a regulated investment company (a “RIC”), under the Internal Revenue Code of 1986, as amended (the “Code”);
•the impact on our business of U.S. and international financial reform legislation, rules and regulations;
•currency fluctuations, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars, could adversely affect the results of our investments in foreign companies;
•the effect of changes in tax laws and regulations and interpretations thereof; and
•the risks, uncertainties and other factors we identify under “Item 1A. Risk Factors” and elsewhere in this Report.
The information contained in this section should be read in conjunction with “Item 1. Consolidated Financial Statements.” Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of the assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Report should not be regarded as a representation by us that our plans and objectives will be achieved.   This discussion contains forward-looking statements, which relate to future events or our future performance or financial condition and involves numerous risks and uncertainties, including, but not limited to, those set forth in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, or the Form 10-K, and Part II, Item 1A of and elsewhere in this Report. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Report. Moreover, we assume no duty and do not undertake to update the forward-looking statements. You are advised to consult any additional disclosures that we make directly to you or through reports that we have filed or in the future file with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the “safe harbor” provisions of the Private
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Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.
OVERVIEW
We are a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. We have elected to be regulated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated, and intend to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code. We are not a subsidiary of, or consolidated with, Morgan Stanley.
Our investment objective is to achieve attractive risk-adjusted returns via current income and, to a lesser extent, capital appreciation by investing primarily in directly originated senior secured term loans issued by U.S. middle-market companies backed by financial sponsors. For the purposes of this report, “middle-market companies” refers to companies that, in general, generate annual EBITDA in the range of approximately $15 million to $150 million, which we believe is a useful proxy for cash flow although not all of our portfolio companies will meet this criteria.
We invest primarily in directly originated senior secured term loans including first lien senior secured term loans (including unitranche loans) and second lien senior secured term loans, with the balance of our investments expected to be in higher-yielding assets such as mezzanine debt, unsecured debt, equity investments and other opportunistic asset purchases. Typical middle-market senior loans may be issued by middle-market companies in the context of leveraged buyouts (“LBOs”), acquisitions, debt refinancings, recapitalizations, and other similar transactions. We generally expect our debt investments to have a stated term of five to eight years and typically bear interest at a floating rate usually determined on the basis of a benchmark (historically, the London Inter-bank Offered Rate, or LIBOR, and the Secured Overnight Financing Rate (“SOFR” or “S”) and prospectively, alternative reference rates).
We generate revenues primarily in the form of interest income from investments we hold. In addition, we generate income from dividends or distributions of income on any direct equity investments, capital gains on the sale of loans and equity investments and various other loan origination and other fees, including commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.
Pursuant to exemptive relief from the SEC granted to our Adviser (as amended, the “Order”) we are able to enter into certain negotiated co-investment transactions alongside certain Affiliated Investment Accounts (as defined in the Order) in a manner consistent with our investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the Order. Pursuant to the Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our eligible directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.
Recent Market Developments
Uncertainty as to the probability of, and length and depth of a global recession and the impact of new variants of the Coronavirus that have emerged in the United States and globally, has created stress on the market and could affect our portfolio companies. In addition, government spending, government policies, including recent increases in certain interest rates by the U.S. Federal Reserve, high oil prices and disruptions in supply chains in the United States and elsewhere, in conjunction with other factors, including those described above, have led and could continue to lead to inflationary economic environments that could affect our portfolio companies, our financial condition and our results of operations. We will continue to monitor the evolving market environment, including as it relates to the Coronavirus pandemic and guidance from U.S. and international public health authorities. In these circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the developments described above on our financial condition, results of operations or cash flows in the future. Despite these factors, we believe we and our portfolio are well positioned to manage the current environment, and we and our Investment Adviser continue to be fully operational.
KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Investments
Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle-market companies, the general economic environment and the competitive environment for the type of investments we make.
Revenue
We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends or distributions on income on direct equity investments, capital gains on the sales of loans and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and typically bear interest at a
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floating rate usually determined on the basis of a benchmark such as LIBOR or SOFR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we may receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments is expected to fluctuate significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement between us and our Investment Adviser (the “Investment Advisory Agreement”); (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement between us and our Administrator (the “Administration Agreement”); and (iii) other operating expenses as detailed below:

•initial organization costs and offering costs incurred prior to the filing of our election to be regulated as a BDC (subject to the expense waiver described below)
•costs associated with our initial private offering;
•costs of any other offerings of our common stock, par value $0.001 per share (the “Common Stock”), and other securities, if any;
•calculating individual asset values and our net asset value (including the cost and expenses of any third-party valuation services);
•out of pocket expenses, including travel expenses, incurred by the Investment Adviser, or members of its investment team or payable to third parties, performing due diligence on prospective portfolio companies and monitoring actual portfolio companies and, if necessary, enforcing our rights;
•base management fee and any incentive fees payable under the Investment Advisory Agreement;
•certain costs and expenses relating to distributions paid by us;
•administration fees payable under the Administration Agreement and any sub-administration agreements, including related expenses;
•debt service and other costs of borrowings or other financing arrangements;
•the allocated costs incurred by the Investment Adviser in providing managerial assistance to those portfolio companies that request it;
•amounts payable to third parties relating to, or associated with, making or holding investments;
•the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
•transfer agent and custodial fees;
•costs of hedging;
•commissions and other compensation payable to brokers or dealers;
•any stock exchange listing fees and fees payable to rating agencies;
•cost of effecting any sales and repurchases of our Common Stock and other securities;
•federal and state registration fees;
•U.S. federal, state and local taxes, including any excise taxes;
•independent director fees and expenses;
•costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;
•the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings, and costs and expenses of preparation for the foregoing and related matters;
•the costs of specialty and custom software for monitoring risk, compliance and overall investments;
•any fidelity bond required by applicable law;
•any necessary insurance premiums;
•indemnification payments;
•any extraordinary expenses (such as litigation or indemnification payments or amounts payable pursuant to any agreement to provide indemnification entered into by the Company);
•direct fees and expenses associated with independent audits, agency, consulting and legal costs;
•cost of winding up; and
•all other expenses incurred by either the Administrator or us in connection with administering our business, including payments under the Administration Agreement based upon our allocable portion of the compensation paid to our Chief Financial Officer and Chief Compliance Officer and reimbursing third-party expenses incurred by the Administrator in
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carrying out its administrative services including, but not limited to, the fees and expenses associated with performing compliance functions.
We reimburse the Administrator or its affiliates for amounts paid or costs borne that properly constitute Company expenses as set forth in the Administration Agreement or otherwise. We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.
PORTFOLIO, INVESTMENT ACTIVITY AND RESULTS OF OPERATIONS
As of June 30, 2022, we had investments in 129 portfolio companies across 29 industries. Based on fair value as of June 30, 2022, more than 99.9% of our debt portfolio was invested in debt bearing a floating interest rate, which floating rate debt investments primarily are subject to interest rate floors. Less than 0.1% of our debt portfolio at fair value had a fixed interest rate. As of June 30, 2022, our weighted average total yield of investments in debt securities at amortized cost was 8.2%. Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2022.
As of December 31, 2021, we had investments in 98 portfolio companies across 27 industries. Based on fair value as of December 31, 2021, 99.9% of our debt portfolio was invested in debt bearing a floating interest rate, which primarily are subject to interest rate floors. Approximately 99.3% of our debt portfolio at fair value had an interest rate floor denoted in LIBOR. The weighted average interest rate floor across our floating-rate portfolio was approximately 0.9% as of December 31, 2021. These floors allow us to mitigate (to a degree) any impact of spread widening on the valuation of our investments. As of December 31, 2021, our weighted average total yield of investments in debt securities at amortized cost was 7.2%. Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2021.
As of June 30, 2022, 70% of our investments, calculated as a percentage of gross debt commitments (funded and unfunded), were loans in support of LBOs and acquisitions of portfolio companies by private equity sponsors. In addition, our debt portfolio displayed the following characteristics, with exception of weighted average yield, as of the closing date of each of our investments1:
•Weighted average yield on debt investments of 8.2%2;
•Weighted average last 12-month EBITDA of approximately $108.1 million of our portfolio companies;
•Weighted average of 6.0x net leverage through tranche of our portfolio companies3;
•Weighted average of 44% loan to value of our portfolio companies4;
•Approximately 82% of debt investments with one or more financial covenants; and
•Approximately 6% of our debt portfolio is in loans that the Investment Adviser believes may be subject to business cycle volatility.

Our portfolio as of June 30, 2022 and December 31, 2021 is presented below:
As of
June 30, 2022December 31, 2021
CostFair Value% of Total Investments at Fair ValueCostFair Value% of Total Investments at Fair Value
First Lien Debt$2,525,593 $2,500,321 93.2 %$2,213,332 $2,224,100 93.2 %
Second Lien Debt135,757 133,157 5.0 120,124 121,550 5.1 
Other Securities44,169 48,501 1.8 39,979 41,724 1.7 
Total$2,705,519 $2,681,979 100.0 %$2,373,435 $2,387,374 100.0 %
1 Calculated as a percentage of gross commitments (funds and unfunded). weighted average EBITDA, net leverage and loan to value exclude recurring revenue investments, which are investments in portfolio companies in which the Company lends based on a multiple of recurring revenue generated by the portfolio company and not based on a multiple of EBITDA.
2 Weighted average yield includes the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2022.
3 Net leverage is the ratio of total debt minus cash divided by EBITDA and taking into account leverage through the tranche that the Company is a lender, excluding recurring revenue investments.
4 Calculated using enterprise value from the private equity sponsor or market comparables divided by total outstanding debt through the tranche that the Company is a lender.
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Our investment activities for the three months ended June 30, 2022 and June 30, 2021 are presented below (information presented herein is at amortized cost unless otherwise indicated):
As of and For the Three Months Ended
June 30, 2022June 30, 2021
New Investments Committed/Purchased
Gross Principal Balance(1)
$399,740 $608,490 
Less: Syndications(69,477)(15,885)
Net New Investments Committed/Purchased$330,263 $592,605 
Investments, at Cost
Investments, beginning of period$2,524,939 $937,829 
New investments purchased392,619 524,400 
Net accretion of discount on investments3,324 3,080 
Payment-in-kind801 313 
Net realized gain (loss) on investments465 (6)
Investments sold or repaid(216,629)(127,979)
Investments, end of period$2,705,519 $1,337,637 
Amount of investments funded, at principal
First lien debt investments$391,615 $476,774 
Second lien debt investments4,896 37,200 
Other securities(2)
3,792 18,839 
Total$400,303 $532,813 
Amount of investments sold/fully repaid, at principal
First lien debt investments$200,866 $120,355 
Second lien debt investments— 5,000 
Total$200,866 $125,355 
Weighted average yield on debt and income producing investments, at cost(3)
8.2 %7.5 %
Weighted average yield on debt and income producing investments, at fair value(3)
8.3 %7.4 %
Number of portfolio companies129 62 
Percentage of debt investments bearing a floating rate, at fair value100.0 %99.9 %
Percentage of debt investments bearing a fixed rate, at fair value(4)
0.0 %0.1 %
(1)Includes new investment commitments, excluding sale/repayments and including new unfunded investment commitments.
(2)Represents dollar amount of other securities funded.
(3)Computed as (a) the annual stated spread, plus Prime/LIBOR/SOFR or interest rate floor, as applicable, plus the annual accretion of discounts, as applicable, on accruing debt securities, divided by (b) total debt investments (at fair value or cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented herein. 
(4)less than 0.1%.
As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments. Our Investment Adviser has developed a classification system to group investments into four categories. The investments are evaluated regularly and assigned a category based on certain credit metrics. Our Investment Adviser’s ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments. Please see below for a description of the four categories of the Investment Adviser’s Internal Risk Rating system:
Category 1 — In the opinion of our Investment Adviser, investments in Category 1 involve the least amount of risk relative to our initial cost basis at the time of origination or acquisition. Category 1 investments performance is above our initial underwriting expectations and the business trends and risk factors are generally favorable, which may include the performance of the portfolio company, or the likelihood of a potential exit.
Category 2 — In the opinion of our Investment Adviser, investments in Category 2 involve a level of risk relative to our initial cost basis at the time of origination or acquisition. Category 2 investments are generally performing in line with our initial underwriting expectations and risk factors to ultimately recoup the cost of our principal investment are neutral to favorable. All new originated or acquired investments are initially included in Category 2.
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Category 3 — In the opinion of our Investment Adviser, investments in Category 3 indicate that the risk to our ability to recoup the initial cost basis at the time of origination or acquisition has increased materially since the origination or acquisition of the investment, such as declining financial performance and non-compliance with debt covenants; however, principal and interest payments are not more than 120 days past due.
Category 4 — In the opinion of our Investment Adviser, investments in Category 4 involve a borrower performing substantially below expectations and indicate that the loan’s risk has increased substantially since origination or acquisition. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. For Category 4 investments, it is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis at the time of origination or acquisition upon exit.
The distribution of our portfolio on the Investment Adviser’s Internal Risk Rating System as of June 30, 2022 and December 31, 2021 was as follows:
June 30, 2022December 31, 2021
Fair Value% of PortfolioNumber of Portfolio CompaniesFair Value% of PortfolioNumber of Portfolio Companies
Risk rating 1$— — %—$44,355 1.9 %1
Risk rating 22,652,843 98.9 1272,343,019 98.1 97
Risk rating 329,136 1.1 2— — —
Risk rating 4— — —— — —
$2,681,979 100.0 %129$2,387,374 100.0 %98
CONSOLIDATED RESULTS OF OPERATIONS
The following table represents our operating results:
For the Three Months EndedFor the Six Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Total investment income$49,994 $26,414 $94,298 $43,759 
Less: Net expenses20,585 10,402 38,374 17,683 
Net investment income29,409 16,012 55,924 26,076 
Less: Excise tax expense— — — 5 
Net investment income (loss) after taxes29,409 16,012 55,924 26,071 
Net change in unrealized appreciation (depreciation)(33,137)3,892 (37,479)8,534 
Net realized gain (loss)465 (6)538 (6)
Net increase (decrease) in net assets resulting from operations$(3,263)$19,898 $18,983 $34,599 
Investment Income
Investment income was as follows:
For the Three Months EndedFor the Six Months Ended

 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Investment income:
Interest income$48,463 $22,784 $91,178 $37,740 
Payment-in-kind interest income277 190 549 378 
Dividend income232 122 541 122 
Other income1,022 3,318 2,030 5,519 
Total investment income$49,994 $26,414 $94,298 $43,759 
The increase in total investment income from $26.4 million for the three months ended June 30, 2021 to $50.0 million for the three months ended June 30, 2022 was primarily driven by our deployment of capital and invested balance of investments. The size of our investment portfolio at fair value increased from $1,351.7 million as of June 30, 2021 to $2,682.0 million as of June 30, 2022. As of such dates, all our senior secured debt investments were income-producing. The fair value of an unsecured debt investment on non-accrual status as of June 30, 2022 was $0.5 million.
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Interest income on our debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of June 30, 2022 and June 30, 2021, and for the periods then ended, all of our first and second lien debt investments were performing and current on their interest payments.
Expenses
The Company is responsible for investment expenses, professional fees, and other general and administrative expenses related to the Company’s operations. Expenses were as follows for the three months ended June 30, 2022 and June 30, 2021, respectively:
For The Three Months EndedFor the Six Months Ended
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Expenses:
Interest and other financing expenses$13,781 $4,218 $24,130 $6,976 
Management fees6,536 2,804 12,718 4,771 
Income based incentive fee5,879 3,540 11,345 5,846 
Capital gains incentive fee(1,694)680 (2,441)1,492 
Professional fees776 549 1,400 1,041 
Organization and offering costs— 3 — 42 
Directors’ fees88 83 175 165 
Administrative service fees54 54 70 104 
General and other expenses67 488 477 727 
Total expenses25,487 12,419 47,874 21,164 
Expense support— 86 39 97 
Management fees waiver(4,902)(2,103)(9,539)(3,578)
Net expenses$20,585 $10,402 $38,374 $17,683 
Excise tax expense$— $— $— $5 
For the three months ended June 30, 2022, net expenses were primarily comprised of interest expense and other financing expenses of $13,781, gross base management fees of $6,536, income based incentive fees of $5,879, capital gains incentive fees reversal of $1,694, administrative service expenses of $54, professional fees of $776, fees to independent directors of $88 and other expenses of $67; offset by management fee waiver of $4,902.
For the three months ended June 30, 2021, net expenses were primarily comprised of interest expense and other financing expenses of $4,218, gross base management fees of $2,804, income based incentive fees of $3,540, capital gains incentive fees of $680, administrative service expenses of $54, professional fees of $549, fees to independent directors of $83, organization and offering costs of $3 and other expenses of $488; offset by management fee waiver and increased by expense support recoupment of previously waived organization and offering costs by the Investment Adviser of $2,103 and $86, respectively.
Interest and other financing expenses increased from $4,218 to $13,781 for the three months ended June 30, 2021 to June 30, 2022. The increase was primarily driven by approximately $1,418.4 million of average borrowings at an average effective interest rate of 3.30% for the three months ended June 30, 2022, as compared to approximately 658.5 million of average borrowings at an average effective interest rate of 2.12% for the three months ended June 30, 2021.
Professional fees include legal, audit, tax, and other professional fees incurred related to the management of our Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of the cost of certain of our executive officers that perform duties for us. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs. Organization costs and offering costs include expenses incurred in our initial formation and our offering of stock.
For the three and six months ended June 30, 2022, expense support includes recoupment of previously waived excess organization and offering costs of $— and $39, respectively. For the three and six months ended June 30, 2021, expense support includes recoupment of previously waived excess organization and offering costs of $86 and $97, respectively. See “Item 1. Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 3.”
Income Taxes, Including Excise Taxes
We have elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our stockholders in each taxable year generally at least 90% of the sum of our ICTI, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our stockholders, which generally relieve us from corporate-level U.S.
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federal income taxes. For the three and six months ended June 30, 2022, we have accrued $0 and $0 of U.S. federal excise tax, respectively. For the three and six months ended June 30, 2021, we have accrued $0 and $5 of U.S. federal excise tax, respectively.
Net Realized Gain (Loss) and Unrealized Gain (Loss) on Investments
For The Three Months EndedFor the Six Months Ended
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Realized and unrealized gains (losses) on investment transactions:
Realized gain (loss):
Non-controlled/non-affiliated investments$465 $(6)$538 $(6)
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments(33,137)3,892 (37,479)8,534 
Net realized and unrealized gains (losses)$(32,672)$3,886 $(36,941)$8,528 
For the three and six months ended June 30, 2022, net realized gain on our investments was $0.5 million and $0.5 million, respectively, primarily driven by the sale of debt and equity investments in our portfolio. For the three and six months ended June 30, 2021, net realized loss on our investments was $0.0 million and $0.0 million, respectively, primarily driven by the sale of debt and equity investments in our investment portfolio.
We determine the fair value of our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. For the three and six months ended June 30, 2022, net change in unrealized loss on our investments of $33.1 million and $37.5 million was primarily driven by the decreases of valuations of our debt and equity investments as a result of the volatile credit environment and spread widening in the primary and secondary markets. For the three and six months ended June 30, 2021, net change in unrealized gain on our investments of $3.9 million and $8.5 million was primarily driven by the increases of valuations of our debt and equity investments in a tightening credit environment and generally strong portfolio company performance.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We generate cash from the net proceeds of offerings of our Common Stock, net borrowings from our credit facilities, and net proceeds of our unsecured debt issuances and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. Details of our credit facilities and unsecured debt issuance are described in “—Debt” below. We may from time to time enter into new credit facilities, increase the size of existing credit facilities or issue additional debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
As of June 30, 2022, we had approximately $80.8 million of cash, which taken together with our approximately $4.7 million, $194.5 million and $596.9 million of availability under the CIBC Subscription Facility, the BNP Funding Facility and the Truist Credit Facility (subject to borrowing base availability) (each as defined below), respectively, and our approximately $391.0 million of uncalled capital commitments to purchase shares of Common Stock, or capital commitments, we expect will be sufficient for our investing activities and sufficient to conduct our operations in the near term. As of June 30, 2022, we believed we had adequate financial resources to satisfy the unfunded portfolio company commitments.
Equity
As of June 30, 2022, we had received aggregate capital commitments of approximately $1,625.7 million.
For the six months ended June 30, 2022, we received proceeds from one capital call and issued shares to our stockholders. The total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements for the six months ended June 30, 2022 were as follows (dollar amounts in millions):
Share Issuance DateShares IssuedAmount
May 16, 20223,548,132 $74.9 
Total3,548,132 $74.9 
The total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements for the six months ended June 30, 2021 were as follows (dollar amounts in millions):
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Share Issuance DateShares IssuedAmount
January 20, 20211,726,689 $35.0 
March 12, 20212,171,816 45.0 
April 12, 20215,326,877 110.0 
May 26, 20214,036,582 85.0 
Total13,261,964 $275.0 
Distributions and Dividend Reinvestment
The following tables summarize our distributions declared and payable for the six months ended June 30, 2022 and June 30, 2021, respectively:
Date DeclaredRecord DatePayment DatePer Share Amount
Dividend Yield(1)
Total Amount
March 25, 2022March 25, 2022April 27, 2022$0.48 9.3 %$27,455 
June 24, 2022June 24, 2022July 27, 20220.47 9.3 %28,601 
Total Distributions$0.95 $56,056 

Date DeclaredRecord DatePayment DatePer Share Amount
Dividend Yield(1)
Total Amount
March 18, 2021March 18, 2021April 22, 2021$0.45 10.1 %$8,570 
June 23, 2021June 23, 2021July 22, 20210.49 10.7 %13,974 
Total Distributions$0.94 $22,544 

(1) Dividend yield (annualized) is calculated by dividing the declared dividend by the weighted average of the net asset value at the beginning of the quarter, the capital called and dividend reinvested during the quarter and annualizing over 4 quarterly periods.
We adopted an “opt in” dividend reinvestment plan (“DRIP”). As a result, our stockholders who elect to “opt in” to the DRIP will have their cash dividends or distributions automatically reinvested in additional shares of Common Stock, rather than receiving cash. Stockholders who receive distributions in the form of shares of Common Stock will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, those stockholders will not receive cash with which to pay any applicable taxes. Shares issued under the DRIP will not reduce an investor’s outstanding capital commitment.
The following tables summarize DRIP shares issued and amounts for the six months ended June 30, 2022 and June 30, 2021:
Payment DateDRIP Shares ValueDRIP Shares Issued
January 25, 2022$7,540 358,891 
April 27, 20226,964 332,212 
Total$14,504 691,103 
Payment DateDRIP Shares ValueDRIP Shares Issued
January 27, 2021$2,462 121,484 
April 22, 20212,276 110,191 
Total$4,738 231,675 
Debt
Our outstanding debt obligations were as follows:
June 30, 2022December 31, 2021
Aggregate Principal CommittedOutstanding PrincipalUnused PortionAggregate Principal CommittedOutstanding PrincipalUnused Portion
CIBC Subscription Facility$280,000 $275,350 $4,650 $400,000 $310,350 $89,650 
BNP Funding Facility600,000 405,500 194,500 600,000 463,500 136,500 
Truist Credit Facility(1)
975,000 377,000 596,875 975,000 476,000 499,000 
2027 Notes425,000 425,000 — — — — 
Total$2,280,000 $1,482,850 $796,025 $1,975,000 $1,249,850 $725,150 
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(1) As of June 30, 2022, a letter of credit of $1.1 million was issued and outstanding, which reduced the unused availability under the Truist Credit Facility of the same amount.
CIBC Subscription Facility
On December 31, 2019, we entered into a revolving credit agreement with CIBC Bank USA as administrative agent and arranger, which was subsequently amended on February 3, 2020, November 17, 2020, January 18, 2022 and February 3, 2022 (as amended, the “CIBC Subscription Facility”). The maximum revolving commitment of CIBC Subscription Facility was permanently reduced to $280.0 million effective May 12, 2022. The CIBC Subscription Facility allows us to borrow up to the maximum revolving commitment at any one time outstanding, subject to certain restrictions, including availability under the borrowing base, which is based on unused capital commitments. The CIBC Subscription Facility bears interest at a rate at our election of either (i) the per annum one or three-month LIBOR, divided by a number determined by subtracting from 1.00 the then stated maximum reserve percentage for determining reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency funding or liabilities, plus 1.65% or (ii) the prime rate plus 0.65%, as calculated under the CIBC Subscription Facility. The CIBC Subscription Facility is secured by the unfunded commitments of certain of our stockholders of the Company. The CIBC Subscription Facility has a maturity date of December 31, 2022.
For the three months ended June 30, 2022 and June 30, 2021, we borrowed $— and $124.0 million, and repaid $35.0 and $153.0 million, respectively, under the CIBC Subscription Facility. For the six months ended June 30, 2022 and June 30, 2021, we borrowed $— and $215.0 million, and repaid $35.0 and $200.0 million, respectively, under the CIBC Subscription Facility. As of June 30, 2022 and December 31, 2021, we had $275.4 and $310.4 million outstanding under the CIBC Subscription Facility, respectively. As of June 30, 2022 and December 31, 2021, we had $4.7 and $89.7 million, respectively, of available capacity under the CIBC Subscription Facility (subject to borrowing base restrictions).
BNP Funding Facility
On October 14, 2020, DLF Financing SPV LLC, our wholly-owned subsidiary (“DLF LLC”) entered into a Revolving Credit and Security Agreement (the “Credit and Security Agreement”, which was subsequently amended on December 11, 2020 and March 2, 2021) with DLF LLC, as the borrower, BNP Paribas (“BNP”), as the administrative agent and lender, the Company, as the equity holder and as the servicer, and U.S. Bank National Association, as collateral agent to (as amended, the “BNP Funding Facility”). As of June 30, 2022, the borrowing capacity under the BNP Funding Facility was $600.0 million. The applicable margin on borrowings during the reinvestment period ranges between 1.95% and 2.75% and, after the reinvestment period, between 2.45% and 3.25%. The obligations of DLF LLC under the BNP Funding Facility are secured by the assets held by DLF LLC. The BNP Funding Facility has a maturity date of October 13, 2025.
For the three months ended June 30, 2022 and June 30, 2021, we borrowed $13.0 and $174.5 million, and repaid $43.0 and $18.0 million under the BNP Funding Facility, respectively. For the six months ended June 30, 2022 and June 30, 2021, we borrowed $13.0 and $389.0 million, and repaid $71.0 and $18.0 million under the BNP Funding Facility, respectively. As of June 30, 2022 and December 31, 2021, we had $405.5 and $463.5 million outstanding under the BNP Funding Facility, respectively. As of June 30, 2022 and December 31, 2021, we had $194.5 and $136.5 million, respectively, of available capacity under the BNP Funding Facility (subject to borrowing base restrictions).
Truist Credit Facility
On July 16, 2021, we entered into a Senior Secured Revolving Credit Agreement with Truist Bank, as amended on December 3, 2021 and May 20, 2022 (the “Truist Credit Facility”). Truist Bank serves as Administrative Agent and Truist Securities, Inc. serves as Joint Lead Arranger and Sole Book Runner. The maximum principal amount of the Truist Credit Facility is $975.0 million, subject to availability under the borrowing base. The Truist Credit Facility includes an uncommitted accordion feature that allows us, under certain circumstances, to increase the borrowing capacity up to $1,000.0 million. The availability period of the Truist Credit Facility will terminate on July 16, 2025. The Truist Credit Facility has a maturity date of July 16, 2026. The Truist Credit Facility is secured by a first priority security interest in substantially all of our assets and the assets of certain of our domestic subsidiaries, subject to certain exceptions.
We may borrow amounts in U.S. dollars or certain other permitted currencies. Borrowings under the Truist Credit Facility bear interest at a per annum rate equal to, (x) for loans for which we elect the base rate option, the “alternate base rate” (which is the highest of (a) the prime rate as publicly announced by Truist Bank, (b) the sum of (i) the weighted average of the rates on overnight federal funds transactions, as published by the Federal Reserve Bank of New York plus (ii) 0.5%, and (c) one month LIBOR plus 1% per annum) plus either (A) 0.75%, or (B) 0.875%, based on certain borrowing base conditions, and (y) for loans for which we elect the Eurocurrency option, the applicable LIBO Rate for the related Interest Period for such Borrowing plus either (A) 1.75% per annum, or (B) 1.875% per annum, based on certain borrowing base conditions. We pay an unused fee of 0.375% per annum on the daily unused amount of the revolver commitments.
For the three months ended June 30, 2022, we borrowed $321.5 and repaid $136.0 million under the Truist Credit Facility. For the six months ended June 30, 2022, we borrowed $452.0 and repaid $551.0 million under the Truist Credit Facility. As of June 30, 2022 and December 31, 2021, we had $377.0 and $476.0 million outstanding under the Truist Credit Facility, respectively. As of June 30, 2022
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and December 31, 2021, we had $596.9 and $499.0 million, respectively, of available capacity under the Truist Credit Facility (subject to borrowing base restrictions).
Unsecured Notes
2027 Notes
On February 11, 2022, we issued $425.0 million in aggregate principal amount of 4.500% notes due 2027 (the “2027 Notes”). The 2027 Notes will mature on February 11, 2027 and may be redeemed in whole or in part at our option at any time or from time to time at the redemption prices set forth in the indenture governing the 2027 Notes. The 2027 Notes are our general unsecured obligations that rank senior in right of payment to all of our existing and future indebtedness that is expressly subordinated in right of payment to the 2027 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by us, rank effectively junior to any of our secured indebtedness (including unsecured indebtedness that we later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities. The 2027 Notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act.
As of June 30, 2022, we were in compliance with all covenants and other requirements of each of the credit facilities and the 2027 Notes.
RECENT DEVELOPMENTS
Subsequent to June 30, 2022 through August 9, 2022, we have closed or the Investment Committee has committed/approved approximately $63.9 million of new/add-on investments. This includes transactions for which a formal mandate, letter of intent or a signed commitment have been issued, and therefore we believe are likely to close. Of these new commitments, approximately $62.9 million were first lien senior secured loans and $1.0 million were equity investments. 100% of the senior secured loans were floating rate loans. We remain highly focused on conducting extensive due diligence and leveraging the Morgan Stanley platform. We continue to seek to invest in companies that are led by strong management teams, generate substantial free cash flow, have leading market positions, benefit from sustainable business models, and are well positioned to perform well despite the impact of the Coronavirus pandemic. We believe the current market environment offers opportunities to seek compelling risk adjusted returns. Our investment pace will depend on several factors including the market environment, deal flow, and the continued impact of the Coronavirus.
On July 15 2022, we delivered a capital drawdown notice to stockholders relating to the sale of approximately 3,911,980 shares of our Common Stock for an aggregate offering price of $80.0 million. The sale closed on July 29, 2022.
Pursuant to a Registration Statement on Form N-14 (File No. 333-264774), on July 20, 2022, we closed an exchange offer in which holders of the 2027 Notes that were restricted because they were issued in a private placement were offered the opportunity to exchange such notes for new, registered notes with substantially identical terms. Through this exchange offer, holders representing 85.87% of the outstanding principal of the then restricted 2027 Notes obtained registered, unrestricted 2027 Notes.
We, as borrower, provided a Commitment Reduction Notice of our intent to reduce the amount of the revolving commitment to $235.0 million from $280.0 million in accordance with and as permitted under the CIBC Subscription Facility. The other terms of the CIBC Subscription Facility were not changed. Such reduction in the revolving commitment under the CIBC Subscription Facility pursuant to the Commitment Reduction Notice was effective as of July 28, 2022.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies including those relating to the valuation of our investment portfolio, should be read in connection with our financial statements in Part I, Item 1 of this Report, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in Part II, Item 7 of our Form 10-K, and “Risk Factors” in Part II, Item 1A of our Form 10-K.
RELATED PARTY TRANSACTIONS
We have entered into a number of business relationships with affiliated or related parties, including the following (which are defined in the notes to the accompanying unaudited financial statements if not defined herein):
•the Investment Advisory Agreement;
•the Administration Agreement;
•the Expense Support and Waiver Agreement;
•the Placement Agent Agreement; and
•the License Agreement.
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See “Item 1. Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 3. Related Party Transactions” in the accompanying unaudited financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including valuation risk, market risk and interest rate risk.
Valuation Risk
We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of portfolio companies. During periods of market dislocation, we will seek to invest prudently in the secondary loan market to provide our investors better risk adjusted returns while adhering to our core investment tenants. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Coronavirus Developments.” Most of our investments will not have a readily available market price. To ensure accurate valuation, our investments are valued at fair value in good faith by our Board of Directors, based on, among other things, the input of the Investment Adviser, our Audit Committee and independent third-party valuation firms engaged at the direction of our Board of Directors, and in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each investment while employing a consistently applied valuation process for the investments we hold. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.
Market Risk
The market value of a security may move up or down, sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Global economies and financial markets are increasingly interconnected, which increases the probabilities that conditions in one country or region might adversely impact issuers in a different country or region. Conditions affecting the general economy, including political, social, or economic instability at the local, regional, or global level, may also affect the market value of a security. Health crises, such as pandemic and epidemic diseases, as well as other incidents that interrupt the expected course of events, such as natural disasters, war or civil disturbance, acts of terrorism, power outages and other unforeseeable and external events, and the public response to or fear of such diseases or events, have and may in the future have an adverse effect on a company’s investments and net asset value and can lead to increased market volatility. See “Item 1A. Risk Factors—General Risk Factors—Risks Relating to Our Business and Structure—We are operating in a period of capital markets disruption and economic uncertainty. The conditions have materially and adversely affected debt and equity capital markets in the United States, and any future disruptions or instability in capital markets may have a negative impact on our business and operations.” and “Terrorist attacks, acts of war, natural disasters, outbreaks or pandemics, such as the Coronavirus pandemic, may impact our portfolio companies and our Adviser and harm our business, operating results and financial condition” in the Form 10-K.
Interest Rate Risk
We are subject to financial market risks, most significantly changes in interest rates. Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates. Because we expect to fund a portion of our investments with borrowings, our net investment income is expected to be affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
As of June 30, 2022, 100.0% of our income-producing senior secured debt investments were at floating rates. Based on our Consolidated Statement of Assets and Liabilities as of June 30, 2022, the following table shows the annualized impact on net income of hypothetical reference rate changes in interest rates (considering interest rate floors and ceilings for floating rate debt instruments assuming no changes in our investments and borrowing structure as of June 30, 2022) (dollar amounts in thousands):
InterestInterestNet
Basis Point Change - Interest RatesIncomeExpenseIncome
Up 300 basis points$68,863 $(31,436)$37,427 
Up 200 basis points$45,908 $(20,957)$24,951 
Up 100 basis points$22,952 $(10,479)$12,473 
Down 100 basis points$(19,565)$10,479 $(9,086)
Down 200 basis points$(26,312)$18,757 $(7,555)
Down 300 basis points$(27,538)$18,757 $(8,781)
We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts or our credit facilities, subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates or
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higher exchange rates with respect to our portfolio of investments with fixed interest rates or investments denominated in foreign currencies. During the periods covered by this Report, we did not engage in interest rate hedging activities.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Report and determined that our disclosure controls and procedures are effective as of the end of the period covered by this Report.
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred for the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
Item 1. Legal Proceedings
The Company, the Investment Adviser and the Administrator may become party to certain lawsuits in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Each of the Company, the Investment Adviser and the Administrator is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also “Note 1 to Consolidated Financial Statements in Part II, Item 8. Consolidated Financial Statements and Supplementary Data” of the Form 10-K.
Item 1A. Risk Factors
In addition to the other information set forth in this Report, you should carefully consider the risk factors previously disclosed under Item 1A of the Form 10-K, which could materially affect our business, financial condition and/or operating results. The risks disclosed in the Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Sales of Unregistered Securities
Refer to “Item 1. Financial Statements—Notes to Consolidated Financial Statements—Note 8. Net Assets” in this Report and our Current Report on Form 8-K filed on May 19, 2022 for an issuance of our Common Stock for the three months ended June 30, 2022. Such issuance was part of our Private Offering pursuant to Section 4(a)(2) of the Securities Act and Regulation D thereunder.
Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.

Item 6. Exhibits
(a) Documents filed as part of this report
(b) Exhibits
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:
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ExhibitDescription
10.2
31.1*
31.2*
32.1*
32.2*
*
Filed herewith
(1)Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed by the Company on May 18, 2022 (File No. 814-01332)
(2)
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed by the Company on May 20, 2022 (File No. 814-01332)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MORGAN STANLEY DIRECT LENDING FUND
Dated: August 9, 2022
By
/s/ Jeffrey S. Levin
Jeffrey S. Levin
Director and Chief Executive Officer
(principal executive officer)
Dated: August 9, 2022
By:
/s/ Venugopal Rathi
Venugopal Rathi
Chief Financial Officer
(principal financial officer)




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