B. Riley Financial Reduces Debt by Approximately $15 Million via Private Bond Exchange

Rhea-AI Summary

B. Riley Financial (NASDAQ: RILY) has executed a privately negotiated exchange agreement with an institutional investor to reduce its outstanding debt by approximately $15 million. The agreement involves exchanging $28 million in outstanding Senior Notes for $13 million in newly issued 8.00% Senior Secured Second Lien Notes due January 1, 2028.

As part of the transaction, B. Riley is issuing warrants to purchase approximately 52,000 common shares at an exercise price of $10.00 per share, exercisable for seven years. Following the exchange, the Notes have a balance of approximately $204 million with $46 million in remaining capacity.

This represents the company's fourth bond exchange in three months, contributing to a total debt reduction of approximately $108 million. Moelis & Company LLC and Sullivan & Cromwell LLP served as financial and legal advisors, respectively.

Positive

• Total debt reduction of approximately $108 million through four bond exchanges in three months
• Current exchange reduces outstanding debt by approximately $15 million
• $46 million in remaining capacity under Senior Secured Second Lien facility for potential further balance sheet improvements

Negative

• Issuance of warrants for 52,000 common shares represents potential dilution for existing shareholders
• Still maintains significant debt with $204 million balance in Notes

Insights

Financial Restructuring Analyst

B. Riley's $15M debt reduction strengthens its balance sheet while continuing strategic deleveraging efforts totaling $108M over three months.

B. Riley Financial has executed a strategic debt restructuring through a privately negotiated exchange agreement that reduces its outstanding debt by approximately $15 million. The transaction involves exchanging $28 million in Senior Notes for $13 million in newly issued 8.00% Senior Secured Second Lien Notes due January 2028.

The mechanics of this exchange are noteworthy. The company is effectively retiring $28 million of unsecured debt across three different maturities: $8 million in December 2026 notes, $2 million in January 2028 notes, and $18 million in August 2028 notes. In their place, B. Riley is issuing $13 million in secured second lien notes and warrants to purchase approximately 52,000 common shares at $10.00 per share, exercisable over seven years.

What makes this transaction particularly significant is that it represents the fourth bond exchange B. Riley has negotiated in just three months, collectively reducing total outstanding debt by approximately $108 million. This systematic approach to deleveraging demonstrates a concentrated effort to strengthen the company's capital structure.

Following this exchange, the balance of the company's Second Lien Notes stands at approximately $204 million with $46 million in remaining capacity. Management has explicitly indicated plans to utilize this remaining capacity for further balance sheet improvements, signaling continued focus on liability management.

The structure of this exchange - trading unsecured debt for a smaller amount of secured debt plus equity warrants - represents a balanced approach to deleveraging that preserves capital while improving the debt profile. The involvement of Moelis & Company as financial advisor and Sullivan & Cromwell as legal advisor underscores the sophisticated nature of this liability management exercise.

LOS ANGELES, July 1, 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 $15 million.

Pursuant to the Agreement and subject to the completion of certain closing procedures, the investor has agreed to exchange approximately $28 million in outstanding Senior Notes, consisting of $8 million in December 2026 notes, $2 million in January 2028 notes, and $18 million in August 2028 notes, for $13 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 52,000 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.

After the exchange, the balance and remaining capacity of the Notes are approximately $204 million and $46 million, respectively.

Bryant Riley, Chairman and Co-Chief Executive Officer of BRF, said: "This marks the fourth bond exchange BRF has negotiated in three months, reducing total outstanding debt by approximately $108 million. We continue to address our capital structure and expect to utilize the remaining capacity under our Senior Secured Second Lien facility to improve our balance sheet further."

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 through its operating entities or affiliates deliver 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, 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

What is the total debt reduction achieved by B. Riley Financial (NASDAQ: RILY) through recent bond exchanges?

B. Riley Financial has reduced its total outstanding debt by approximately $108 million through four bond exchanges completed in the past three months.

What are the terms of B. Riley Financial's (NASDAQ: RILY) latest bond exchange agreement?

The company is exchanging $28 million in outstanding Senior Notes for $13 million in new 8.00% Senior Secured Second Lien Notes due January 2028, plus warrants for 52,000 common shares at $10.00 per share.

What is the remaining balance and capacity of B. Riley Financial's (NASDAQ: RILY) Notes after the exchange?

After the exchange, the Notes have a balance of approximately $204 million with $46 million in remaining capacity.

What warrants is B. Riley Financial (NASDAQ: RILY) issuing as part of the exchange?

B. Riley is issuing warrants to purchase approximately 52,000 common shares at an exercise price of $10.00 per share, exercisable for seven years from the issuance date.

Who advised B. Riley Financial (NASDAQ: RILY) on the bond exchange agreement?

Moelis & Company LLC acted as financial advisor and Sullivan & Cromwell LLP acted as legal advisor to B. Riley Financial.