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Get filing alertsMSDL issues $350M unsecured notes at 6.100%, swaps to floating to match loan portfolio
Filed July 9, 2026 · Period ending July 9, 2026 · ~1 min read
Key Changes
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Issued $350M of 6.100% unsecured notes due 2031, receiving net proceeds of $341.6M after fees to repay secured debt, improving debt structure by replacing secured with unsecured obligations.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Entered interest rate swaps on full $350M notional, receiving fixed 6.100% and paying SOFR + 2.1945%, converting to floating-rate to hedge against rate risk and match predominantly floating-rate loan portfolio.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Notes callable at company's option before June 2031 at par plus make-whole premium, at par thereafter; rank senior to subordinated debt but junior to secured debt and subsidiary obligations.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Change of control provision requires company to offer repurchase at par plus accrued interest, providing noteholders liquidity option and downside protection.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Indenture requires compliance with Investment Company Act asset coverage ratios even if not legally required, and ongoing financial disclosure if SEC reporting ceases.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
Summary
Morgan Stanley Direct Lending Fund issued $350 million of unsecured notes due 2031 at a 6.100% coupon, netting $341.6 million after fees. The proceeds will repay secured debt under existing financing arrangements, improving the capital structure by replacing secured obligations with unsecured ones.
Simultaneously, MSDL entered interest rate swaps covering the full notional amount, receiving the fixed 6.100% coupon and paying SOFR + 2.1945%, effectively converting the debt to floating-rate. The swap strategy is material for investors because it aligns the company's liability costs with its predominantly floating-rate loan portfolio, hedging interest rate risk.
Without the swaps, rising rates would compress net interest margin as portfolio yields adjust while debt costs remain fixed. The conversion maintains spread stability as benchmark rates move. The notes rank junior to secured debt but senior to subordinated obligations, and include standard change-of-control protections requiring a par repurchase offer. The indenture also mandates compliance with Investment Company Act asset coverage ratios regardless of legal requirement, providing structural protection to noteholders.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
The net proceeds to the Company were approximately $341.6 million, after deducting the underwriting discount and estimated offering expenses. The Company intends to use the net proceeds to repay outstanding secured indebtedness under its financing arrangements.
The Company received net proceeds of approximately $341.6 million after fees and expenses. These proceeds will be used to repay outstanding secured indebtedness under existing financing arrangements, which improves the Company's debt structure by replacing secured debt with unsecured obligations.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 10, 2026 · How we verify