As mentioned last night B Riley (RILY) priced 8 million $25 baby bonds at 6%–twice the number of bonds pre-announced.
The bonds will trade in a few days on NASDAQ–those wanting earlier bonds will have to call their brokers bond desk with the CUSIP.
The company will use the proceeds to call all or a portion of the 7.50% RILYZ note issue.
The pricing term sheet can be read here.
Bought a very small position Tuesday of RILYT at $24.94. For some reason, it’s run way up today. Sold it for $25.94. Glad to take the buck each and move on!
LOS ANGELES, Jan. 25, 2021 /PRNewswire/ — B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”) today announced that it has closed an underwritten registered public offering of $200 million aggregate principal amount of 6.00% senior notes due 2028. The Company has granted the underwriters a 30-day option to purchase up to an additional $30 million aggregate principal amount of senior notes in connection with the offering.
B. Riley Financial and this issuance of notes both received an investment grade rating of BBB+ from Egan-Jones Ratings Company, an independent, unaffiliated rating agency. The notes are expected to begin trading on NASDAQ under the symbol “RILYT” following the closing date of this offering.
The offering resulted in net proceeds of approximately $193.7 million after deducting underwriting discounts and commissions, but before expenses. The Company expects to use the net proceeds in excess of $50 million from the sale of the notes for the redemption of all or a portion of its existing 7.50% Senior Notes due 2027 as soon as practicable and the remaining net proceeds for general corporate purposes, including funding future acquisitions and investments, repaying indebtedness, making capital expenditures and funding working capital.
Gotta love that caveat, “as soon as practicable.” As a holder of RILYZ, I’ll await happily until it becomes “practicable” in RILY’s eyes, but I’m over my skis allocated expecting to have their initial call lighten me up if not take me out completely. So we’ll see how it goes…. with a short term horizon in sight, this looks now like another money market alternative investment ala MVCD, the TCO babies, NIGHCO and P, and LMIBL and CL.
TCO prefs are called for 1-28-2021, I’ll miss mine.
I agree that it seems earliest call will be late February. But why would you guess that the call would be partial? Seems the new issue raised plenty of money for a full call.
RB – Yes the money raised by the new issue is sufficient to call the whole thing, but imho, RILY has a history of foot dragging in retiring their issues, plus I believe every time an issue is called, it generates a loss on the books that they might wish to manage as others seem to do… pure speculation on my part. Some might call it wishful thinking…
For those following RILYZ, language in today’s Form 424B5 says, “This prospectus supplement shall not constitute a notice of redemption under the indentures governing the 7.50% 2027 Notes. Any such notice, if made, will only be made in accordance with the provisions of the applicable indenture.” I think that means the earliest possible call date will be no earlier than 2/24, 30 days after settlement on the new issue… and my guess is the first announcement will be for a partial call, not full, whenever it’s announced…… I think that comes to 25.12 approx as minimum price for a call on RILYZ. File away in the picking up pennies drawer.
I have a question which will expose my complete lack of knowledge. Do all the $25 baby bonds trade with accrued interest like regular bonds? In other words, do you earn interest from day one or just on ex day?
AF. Some folks call it trading “dirty,” which means that the accrued interest is already baked into the market price. You have to own it before the x-div date has occurred to actually get the interest.
Applies to exchange traded preferred as well. As well as other denominations. They aren’t all 25$.
Thanks for your help. It’s been a very long time since I was ridin’ dirty.