Morgan Stanley Direct Lending Fund 8-K

What Happened
Morgan Stanley Direct Lending Fund (the Company) announced on July 9, 2026 that it entered into a Fourth Supplemental Indenture with U.S. Bank Trust Company, N.A. to issue $350.0 million aggregate principal of 6.100% notes due July 15, 2031. The offering closed July 9, 2026 and was registered under the Company’s Form N-2 registration statement. The Notes pay interest at 6.100% annually, payable semi‑annually on January 15 and July 15 beginning January 15, 2027, and may be redeemed prior to June 15, 2031 at par plus a make‑whole premium and at par on or after June 15, 2031.

Key Details

• Principal amount: $350.0 million of 6.100% notes due July 15, 2031.
• Net proceeds: approximately $341.6 million after underwriting discount and estimated offering expenses; intended to repay outstanding secured indebtedness under financing arrangements.
• Security and ranking: general unsecured obligations of the Company; senior to expressly subordinated debt, pari passu with other unsecured unsubordinated debt, effectively junior to secured debt to the extent of collateral value, and structurally junior to debt of the Company’s subsidiaries/financing vehicles.
• Hedging: Company entered into interest rate swaps on the full $350.0 million, receiving fixed 6.100% and paying floating SOFR + 2.1945%; swaps designated under qualifying hedge accounting.
• Covenants and protections: Indenture includes covenants to meet certain asset coverage requirements under the Investment Company Act and requires certain financial reporting if Company ceases SEC reporting; a change‑of‑control repurchase event would require an offer to repurchase notes at 100% of principal plus accrued interest.

Why It Matters
This transaction creates a new $350M unsecured obligation for the fund while generating cash to pay down secured financing, which may reduce secured leverage and interest cost risk tied to those facilities. Investors should note the notes are unsecured and can be structurally junior to subsidiary obligations, which affects relative payment priority in stress scenarios. The interest rate swaps are intended to align the fixed coupon on the notes with the Fund’s predominantly floating‑rate loan portfolio, reducing interest rate mismatch risk. The covenants and change‑of‑control repurchase feature provide some investor protections, and the reporting requirements preserve transparency if the Company stops SEC reporting.