Morgan Stanley Direct Lending Fund's shares tick down in market debut

Morgan Stanley Direct Lending Fund

24/01/2024 16:57

Jan 24 (Reuters) - Shares of Morgan Stanley Direct
Lending Fund (MSDL)  MSDL.N  dipped 1% in their market debut on
Wednesday, as investor appetite for new issues continues to
remain muted. 
    The fund chiefly invests in riskier bonds, like those issued
by middle-market companies or by private equity firms looking to
finance their acquisitions. Such bonds typically fetch higher
interest than top-rated corporate debt. 
    The lukewarm debut comes days after a tepid reception to
Kazakhstan-based banking and fintech giant Kaspi.kz  KSPI.O ,
and underscores that investors continue to be cautious around
new listings.
    MSDL's stock began trading at $20.45 apiece compared with
the IPO price of $20.67 each, at which it sold 5 million shares
to raise $103.35 million in its initial public offering. 
    U.S. commercial and regional banks have been adopting a more
risk-averse approach due to heightened regulation and economic
uncertainty. Their retreat from risky market segments has
allowed alternative lenders to cash in. 
    The MSDL fund is managed by a unit of Wall Street giant
Morgan Stanley  MS.N . The fund intends to use proceeds from the
IPO to pay down some of its debt.
    MSDL had an investment portfolio of $3.1 billion measured by
fair value and a net asset value of $1.5 billion, as of Sept.
30, 2023. Its primary source of income is from investments it
holds and capital gains on the sale of loans or securities. 
    Morgan Stanley, J.P. Morgan, and Wells Fargo Securities are
acting as lead joint book-running managers for the offering. 

 (Reporting by Niket Nishant and Manya Saini in Bengaluru;
Editing by Shailesh Kuber)
 ((Manya.Saini@thomsonreuters.com;))