B Riley Prices Senior Notes

B Riley (NASDAQ:RILY) has priced the new issue of notes mentioned earlier today and terms are a bit more lucrative than we had imagined.  The issue priced at 7.375%.  The notes will mature in 2023.

We had previously mentioned a bonus for early redemption in the preliminary prospectus – the bonus remains but the final pricing is a bit more generous.  If called after 5/31/2020 and before 5/30/2021 holders will receive $25.75 plus accrued interest.  Between 5/31/2021 and 5/30/2022 holders receive $25.375 plus accrued interest.  After this date and up to maturity redemption is for $25 plus accrued interest.

Shares will trade under the ticker RILYH likely before the week is over.  No OTC Grey market trading will take place.

The pricing term sheet can be found here.

9 thoughts on “B Riley Prices Senior Notes”

  1. Tim, thanks for the update on this issue. B Riley keeps on issuing senior notes. Do you have any idea what they are doing with all of the proceeds? The standard line is “for general corporate purposes”, but another $50 million for a relatively small company seems a little odd to me.

    1. Hi kaptain–this one is to help pay for an acquisition of MagicJack–a VOIP company. Seems out of their wheelhouse, but I need to do a deeper dive to understand in total what all B Riley does. I do own the RILYZ issues right now, but deals like this make me a little uncomfortable.

      1. Thanks for the reply Tim. This is certainly an unusual transaction for a brokerage company and I will probably pass on the new issue. Just seems like a little out of their area of expertise.

        1. Believe it or not they also own Juno and Netzero also. I suspect Magicjack works in with that. This is one of Rileys subsidiaries doing this. This company is too unweildy for me to understand. Makes me a bit nervous about my RILYL.

          1. Hi Grid–you are correct–unwieldy. I did a few minutes of reading last night and I think it is ok to hold the baby bonds, but they have a number of businesses that bare watching—this is not one for ‘cruise control’. They are liquidating Bon-Ton now so that may give one of their businesses a bump for a quarter or two, but after that ???

  2. Unusually large call premia. Already own too much RILYL but may swap some for the new issue, depending on how it trades.

  3. Thanks, Tim. 7.375%, not bad. However, I already own some RILYL and RILYZ. Not to much but I’ll have to think about adding another RILY to my bag.

    1. Same here, Charles. Already holding 2 RILY alternates. Both have been slapped hard the past few days as I recall. Today no different. 10yr really blowing its lid today.

      Might be worthwhile to sell off RILYG and move up a tad in interest payments to this new note. But then again, you’re pushing the call date out 3 years.

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