B Riley Financial Upsizes Baby Bond Offering

B Riley Financial (RILY) which had initially announced a new offering of 2 million shares (bonds) has sold the issue and it has upsized the issue to 4.6 million plus an over allotment of 690,000.

The company has announced at least a partial redemption of 7.50% RILYZ notes. There are about 4.4 million shares of the RILYZ outstanding.

The coupon is 6.375%. The issue is rated BBB+ by Egan Jones.

An early redemption date starts on 2/28/2021–the company will pay a 3% premium the 1st year (2021-2022), a 2% premium the second year (2022-2023) and 1% the 3rd year (2023-2024). There after until maturity on 2/28/2025 redemption will be at $25 plus accrued interest.

There likely will be NO Grey Market Trading, but one may be able to secure some before exchange trading by calling their brokerage.

The pricing term sheet can be read here.

Gridbird was on top of this pricing.

23 thoughts on “B Riley Financial Upsizes Baby Bond Offering”

  1. Whatever happens with the call of RILYZ, I bought some at 25.28. It is high yielding cash at worst and a potentially nice pop if only partially called.

    1. kapil–pretty sure they haven’t announced an official call yet–baby bonds aren’t redeemable until 5/31/2020. You are right this will be an ok hold for at least a few months–maybe much longer with a call threat keeping it maybe around 25

    2. You’ll get about 62 cents of dividends between now and then. 4.5% yield to call. You may do better by selling earlier. If it’s a partial call the remaining shares will probably sell above par. Of course the risk is that RILY falls apart before then.

  2. At a quick glance, I’m having a hard time seeing where the value is on this one in relation to the other issues from the company. It doesn’t seem to be an opportunity to flip at around $25 unless I’m missing something.

  3. Just a heads up; I initiated a position at Vanguard for RILYM through the CUSIP number given to their bond trade at $24.92. Anyone else execute an order?
    Wishing you profitable investing, Nomad

    1. It took me 20 minutes on the phone with Vanguard but I was able to make the purchase at 24.95. No commission.

  4. Are you sure about the 2.1M shares of RILYZ? I think that was the IPO but it appears they added some at some point. The 10Q says there is 108-110M of RILYZ. That’s what Etrade says too.

      1. Max–on baby bonds there is not a set date–likely in the next week. Typically you have to watch your broker and see when their system recognizes the ticker. Or just by being here we will know because folks will begin to comment on when it trades.

        1. Schwab bond desk will trade it today if you call, but for a $25 fee. At least that was my experience.

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