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B Riley To Sell Baby Bonds

In an unusual late day filing B Riley Financial (RILY) has announced another issuance of baby bonds.

The company, which has become a serial issuer of debt, plans to sell 5 million shares.

The company has stated that proceeds over $100 million (if any) will be used to redeem some (or all) of the 7.25% issue (RILYG) issue.

The issue will have a maturity date in 2026.

RILY has a very long list of baby bonds and preferred shares outstanding which can be seen here.

The preliminary prospectus for this new issue can be found here.

J noticed this late day filing.

16 thoughts on “B Riley To Sell Baby Bonds”

  1. RE: RILYG – interestingly, underwriters apparently did not exercise the full green shoe amount of $22,500,000. on the new issue of RILYK. According to https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=115754787&type=HTML&symbol=RILY&companyName=B.+Riley+Financial+Inc.&formType=8-K&dateFiled=2021-03-29&CK=1464790 Total size of new issue was $150 mil plus $9,493,250 aggregate principal amount of Additional Notes. Thus, according to their intended formula of using amounts over $!00 mil for probable retirement of whole or part of RILYG, there’s only about $60 mil raised that will go toward a RILYG call… Latest 10k says $122,793 mil of RILYG is outstanding… So unless other additionally available cash is used as well, less than half of outstanding RILYG will be subject to eventual call based on the proceeds from this issue alone.

    1. More clearly stated in their associated press release https://www.sec.gov/Archives/edgar/data/1464790/000121390021018294/ea138519ex99-2_brileyfin.htm – “The offering resulted in net proceeds of approximately $154.5 million after deducting underwriting discounts and commissions, but before expenses. The Company expects to use the net proceeds in excess of $100 million from the sale of the notes for the redemption of all or a portion of its existing 7.25% 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.”

    2. 2wr–looking at their balance sheet which is highly levered I guess someone is getting smarter about the risk in the RILY issues.

  2. As noted on reader alerts, a lot of new issues coming to market. All the issuers trying to lock in lower rates and refinance. Even like Riley, if they do call the G will only make a difference of 1yr in maturity? but less interest paid out.
    What happens in the market will put pressure on other debt instruments.
    Why buy a 10 yr treasury getting 1.65% when you can buy a 5yr that might yield 5-3/4% to 6%?
    Higher risk I know, but even with all the money sloshing around the Fed is borrowing a lot and it may force them to offer higher rates to get investors to buy. JMTC

    1. Thanks, Mike.

      Everyone, here is their March 1st announcement on the full redemption of RILYZ:

      LOS ANGELES, March 1, 2021 /PRNewswire/ — B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”) today announced that it will redeem all of the issued and outstanding 7.50% Senior Notes due 2027 (the “Notes”) on March 31, 2021 (the “Redemption Date”). The Notes have an aggregate principal amount of $128,155,700.

      The redemption price is equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest up to, but excluding, the Redemption Date, as set forth in each notice of redemption delivered to noteholders (the “Redemption Payment”).

      Interest on the Notes will cease to accrue on and after the Redemption Date. The Notes, which are listed on NASDAQ under the ticker symbol “RILYZ,” will be delisted and cease trading on the Redemption Date.

  3. Any thoughts why they wouldn’t redeem the RILYZ paying 7.5%? I own some of those and think I may be on borrowed time.

  4. I own the a lot of RILYG at a slight discount to par so I’m sorry to hear this news. Hope it’s only a minor/partial call, but have no idea what the probabilities are. Any thoughts…………..

    1. randy–in January they said they would redeem the 7.50% Z issue, but it doesn’t appear they have done so yet–so it would seem that they take their time getting these calls done.

      1. On March 1st Company announce Full Redemption of “Z”
        BY PR Newswire
        — 4:01 PM ET 03/01/2021
        LOS ANGELES, March 1, 2021 /PRNewswire/ — B. Riley Financial, Inc. (RILY) (“B. Riley” or the “Company”) today announced that it will redeem all of the issued and outstanding 7.50% Senior Notes due 2027 (the “Notes”) on March 31, 2021 (the “Redemption Date”). The Notes have an aggregate principal amount of $128,155,700.

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