Morgan Stanley’s Direct Lending Fund has raised $350m through a five-year investment-grade bond to refinance existing debt, according to a report by Bloomberg.
The business development company reportedly priced the note at a yield of 2.20 percentage points above Treasuries, around 25 basis points tighter than initial price talk. The deal matched the fund’s target size.
The transaction marks the fund’s first bond sale in just over a year, after it issued the same amount in May 2025. The wider BDC market has faced increased investor scrutiny this year over loan quality and the potential impact of artificial intelligence disruption on software borrowers.
Despite those concerns, BDC access to investment-grade debt markets has remained largely open. Last week, a T Rowe Price Group private credit fund raised $400m in its inaugural bond sale, with demand reportedly more than three times the size of the offering.
Proceeds from the Morgan Stanley fund’s new notes will reportedly be used to refinance existing borrowings, which may include revolving credit facilities with Truist Financial and BNP Paribas, according to an exchange filing.
