B Riley to Sell Preferred Offering

In what is a new direction for financial services firm B Riley Financial (RILY) the company will sell a new issue of fixed rate preferred stock.

B Riley has been a serial issuer of baby bonds, most recently issuing a 6.50% issue. All their outstanding issues can be seen here. NOTE that the RILYL 7.50% baby bond is in the process of being called.

A quick look at the preliminary prospectus shows this to be fairly typical for preferreds, although we have not studied it completely.

The preliminary prospectus can be read here.

Fabrib was right on this one posting it only minutes after the announcement on the Reader Initiated Alerts page.

13 thoughts on “B Riley to Sell Preferred Offering”

    1. Hi Lewis,
      Nope, not yet – but I would expect it to be within the next few weeks if not days.

  1. While nominally considered a financial services company on a revenue basis, B Riley actually derives more income from its auction and liquidations division than it does from its capital markets division. Auction and liquidations also drives the growth of the appraisal valuation and principal investments divisions as B. Riley often cross sells its services and/or directly invests in the distressed or orphaned company.

    Truly a unique and sustainable business model…which combined with a West coast management style, flummoxes the white shoe bond drones attempting to analyze it.

    1. West Coast Management style. I googled for 15 minutes and nothing. But I did find a ton of info on West Coast football style, which is put the game in the hands of the quarterback. So in investment terms, I think that means let the fund manager manage the funds. So hopefully that is a good sign that the fund manager is managing the fund.

      Me? This investment firm is putting out baby bonds every month or two. Since that west coast style offense is unique among all the investments that I see, I will stay away. Anything that strays from normal.. usually is not a good thing average wise across the industry. Usually outliers are outliers for a reason – statistically speaking, and that means risk.

  2. Depositary Shares Represent an Interest in 6.875% Series A Cumulative Perpetual Preferred Stock

    LOS ANGELES, Oct. 2, 2019 /PRNewswire/ — B. Riley Financial, Inc. (RILY) (“B. Riley” or the “Company”) today announced the pricing of its underwritten registered public offering of 2,000,000 depositary shares at an initial public offering price of $25.00 per depositary share, raising gross proceeds of $50 million before deducting underwriting discounts and other estimated offering expenses. Each depositary share represents a 1/1000th fractional interest in a share of the Company’s 6.875% Series A Cumulative Perpetual Preferred Stock. Dividends on the Series A Preferred Stock underlying the depositary shares will be paid when declared by the Board at a fixed rate of 6.875% with a liquidation preference equivalent to $25.00 per depositary share.

    1. In connection with the offering, the Company has granted the underwriters a 30-day option to purchase up to an additional $7.5 million of depositary shares solely to cover overallotments. The offering is expected to close on or about October 7, 2019, subject to customary closing conditions.

      The Company’s depositary shares are expected to begin trading on NASDAQ under the symbol “RILYP” within 30 business days of the closing date of this offering, if approved.

      Net proceeds of this offering will be used for general corporate purposes, including funding future acquisitions and investments, repaying indebtedness, making capital expenditures and funding working capital.

  3. I wonder if the eventual path to calling RILYZ and RILYG when callable will be to redeem them with preferreds. Will be interesting to see if today’s pricing implies there would be significant savings by refinancing Z and G with prefs. They probably don’t want to keep issuing more bonds.

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