B. Riley Financial Announces Private Bond Exchange to Reduce Debt by Approximately $12 Million

Rhea-AI Summary

B. Riley Financial (NASDAQ: RILY) has announced a private bond exchange agreement with an institutional investor that will reduce its total outstanding debt by approximately $12 million. The agreement involves exchanging approximately $22 million in outstanding Senior Notes for $10 million in newly issued 8.00% Senior Secured Second Lien Notes due January 1, 2028.

As part of the transaction, the company will issue warrants to purchase approximately 40,000 common shares at an exercise price of $10.00 per share, exercisable for seven years from the issuance date. This represents the company's second exchange as part of its ongoing efforts to strengthen its capital structure.

Positive

• Debt reduction of $12 million improves balance sheet
• Successful execution of second exchange agreement shows continued progress in capital structure improvement
• New notes are secured by second lien, providing better debt structure

Negative

• Potential dilution from 40,000 warrant shares at $10.00 exercise price
• New notes carry 8.00% interest rate, representing ongoing interest expense
• Company still seeking additional transactions to improve balance sheet, indicating continued financial restructuring needs

News Market Reaction

-4.23%

1 alert

-4.23% News Effect

On the day this news was published, RILY declined 4.23%, reflecting a moderate negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

LOS ANGELES, April 7, 2025 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("BRF" or the "Company"), a diversified financial services company, today announced it has entered into a privately negotiated exchange agreement (the "Agreement") with an institutional investor, which will reduce the Company's total outstanding debt by approximately $12 million.

Pursuant to the Agreement and subject to the completion of certain closing procedures, the investor has agreed to exchange approximately $22 million in outstanding Senior Notes for $10 million in newly issued 8.00% Senior Secured Second Lien Notes due January 1, 2028 (the "Notes"). In addition, the Company is issuing to the investor warrants to purchase an aggregate of approximately 40,000 common shares at an exercise price of $10.00 per share. The warrants are exercisable for a period of seven years from the issuance date.

Bryant Riley, Chairman and Co-Chief Executive Officer of BRF, said: "This second exchange is another step forward as we work to strengthen our capital structure. We will continue to utilize the remaining capacity under our Senior Secured Second Lien facility to conduct additional transactions to improve our balance sheet."

Moelis & Company LLC acted as financial advisor and Sullivan & Cromwell LLP acted as legal advisor to BRF with respect to the Agreement.

No Offer or Solicitation
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall it constitute an offer to sell, solicitation or sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful.

About B. Riley Financial
B. Riley Financial (BRF) is a diversified financial services company that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. BRF leverages cross-platform expertise to provide clients with full service, collaborative solutions at every stage of the business life cycle. Through its subsidiaries and affiliated entities, BRF provides end-to-end financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. BRF opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. BRF refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries or affiliates. For more information, please visit www.brileyfin.com.

Forward-Looking Statements
Statements made in this press release that are not descriptions of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of today's date. All statements other than statements of historical fact are forward-looking statements and include the completion of the closing procedures related to the exchange. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and the Company assumes no duty to update forward-looking statements, except as required by law. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, some of which are beyond the control of the Company, including, but not limited to, the risks described from time to time in the Company's periodic filings with the SEC, including, without limitation, the risks described in the Company's 2023 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable). These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and the Company undertakes no duty to update this information.

Contacts
Investors
ir@brileyfin.com

Media
press@brileyfin.com 

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SOURCE B. Riley Financial

FAQ

How much debt reduction will B. Riley Financial (RILY) achieve through the April 2025 bond exchange?

B. Riley Financial will reduce its total outstanding debt by approximately $12 million through this private bond exchange agreement.

What are the terms of RILY's newly issued Senior Secured Second Lien Notes in the 2025 exchange?

The new notes are 8.00% Senior Secured Second Lien Notes due January 1, 2028, worth $10 million.

What warrant terms are included in RILY's April 2025 bond exchange agreement?

The agreement includes warrants to purchase approximately 40,000 common shares at $10.00 per share, exercisable for seven years.

How much existing Senior Notes are being exchanged in RILY's April 2025 debt restructuring?

Approximately $22 million in outstanding Senior Notes are being exchanged in the transaction.