Adding a Baby Bond to the High Yield Portfolio

We have added the B. Riley 7.50% baby bond (NASDAQ:RILYZ) to the High Yield Portfolio.

This is the last item we are adding for a week or two as the portfolio is 74% invested and we are looking for a Fed Funds rate hike on March 21st of 1/4%.  While the movement of short term rates doesn’t directly affect long rates we are still cautious.

We added the B Riley issue noted above to add another bit of diversity to the portfolio.  RILY has generally performed well, but they have undertaken a couple of large acquisitions in the last year and ‘digestion’ is still taking place.

This particular issue doesn’t mature until 2027 which is further away than we would prefer, but the other 7.50% B Riley issue was trading at a higher price with a lower current yield so this was slightly preferred–although an investor could flip a coin between the issues.  It is noted that the RILYL issue (the other 7.50% issue) does become optionally callable in October of this year–but we don’t believe there is high likelihood of a call.



4 thoughts on “Adding a Baby Bond to the High Yield Portfolio”

  1. Im with you on RILY, Tim. Except I flipped the coin and landed on RILYL. Right or wrong, I sacrificed the bps to go with the shorter duration.

    1. Yes Grid–I typically go with the shorter maturities–but thought I would go crazy on this one.

    1. Hi Wedgehead–will have to take a look at it–don’t think I am familiar with it.


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