B Riley Prices Baby Bonds

B Riley, once again, has come to market with a new baby bond which has been priced at 6.875%.  This after coming to the market on 5/14/2018 with an issue at 7.375%.  Additionally they sold 2 issues last year with coupons of 7.50% and 7.25%.  They had previously come to market in 2016 with a small 7.50% issue.  All total they will now have 5 issues outstanding.

The new issue will trade within 30 days under the ticker RILYI and will consist of 3.48 million shares with another 522 thousand set aside for overallotment.

The pricing term sheet can be found here.

The company plans to use the proceeds for general corporate purposes.

I should note that the new issue contains a bonus payment for early redemption–

The bonds will mature in 2023 and will have an early redemption optionally available to the company starting in 2020.  The early redemption starting 9/30/2020 would be at $25.50 then going to $25.25 starting 9/30/2021 and then after 9/30/2022 at $25.

Earlier issues of baby bonds did not contain this bonus and the most recent 7.375% baby bond DID contain it.  This issue is the only issue trading strongly so apparently this is meaningful to some–not me as the likelihood of them being called early is very remote.

I had originally thought that this issue would trade weakly–but now I believe I was wrong on that observation.  The bonus for an early redemption appears to be attractive to investors and thus they may be willing to own this issue around $25.

3 thoughts on “B Riley Prices Baby Bonds”

  1. Just a heads up, this baby bond has begun to trade and is currently priced at $24.95/$24.99. Wishing you profitable investing, Nomad

    1. I just purchased 100 shares of RILYI at $24.89.

      I also hold 200 shares of RILYH. I sold my RILYL shares last week.

      1. Thanks Gary–that is firmer than I think it should trade–but demand is what it is.

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