B. Riley Financial Initiates Debt Reduction Through Bond Exchange
B. Riley Financial Takes Strategic Steps to Decrease Debt
B. Riley Financial, Inc. (NASDAQ: RILY), a dynamic player in the realm of diversified financial services, has recently made a significant move that will bolster its fiscal health. The company has entered into a privately negotiated bond exchange agreement with an institutional investor. This landmark arrangement is expected to reduce the firm's total outstanding debt by approximately $12 million, marking a strategic step toward a sounder financial footing.
Details of the Bond Exchange Agreement
Under the terms of the agreement, the investor will exchange roughly $22 million worth of outstanding Senior Notes for newly issued 8.00% Senior Secured Second Lien Notes valued at $10 million. These new notes, termed the "Notes," will mature on January 1, 2028, further optimizing the company's debt structure.
Moreover, as part of this exchange, the institutional investor will also receive warrants enabling the purchase of approximately 40,000 common shares at an exercise price of $10.00 per share. These warrants will be available for exercise for a period of seven years from their issuance date, providing additional avenues for capital enhancement in the years to come.
CEO Comments on the Exchange
Bryant Riley, the Chairman and Co-Chief Executive Officer of B. Riley Financial, expressed optimism regarding this financial maneuver: "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." His words underline the company's commitment to maintaining a robust financial structure that promotes growth and stability.
Financial Advisory Support
To navigate this significant transaction, B. Riley Financial enlisted the expertise of Moelis & Company LLC as its financial advisor, while Sullivan & Cromwell LLP played the role of legal advisor. This collaborative approach ensures that the company is well-supported in proceeding with this critical financial strategy.
About B. Riley Financial
As a diversified financial services firm, B. Riley Financial excels in delivering customized solutions tailored to meet the operational, strategic, and capital needs of its clients and partners. With an array of services spanning investment banking, institutional brokerage, private wealth management, and financial consulting, B. Riley is equipped to provide end-to-end solutions across all stages of the business life cycle.
Furthermore, through its subsidiaries, the company is positioned to offer comprehensive financial services that cover a vast range of areas including corporate restructuring, operational management, risk and compliance, and appraisal services. B. Riley Financial is dedicated to driving value for its shareholders, and certain affiliates are actively engaged in originating and underwriting senior secured loans targeted at asset-rich companies, reflecting a proactive investment strategy.
Looking Ahead
With the ongoing execution of strategies like the current bond exchange, B. Riley Financial demonstrates its commitment to enhancing its capital structure and positioning itself for future growth. As the financial landscape continues to evolve, the company is poised to adapt and thrive, focusing on creating sustainable value.
Frequently Asked Questions
What is the main goal of the bond exchange agreement?
The bond exchange agreement aims to reduce B. Riley Financial's outstanding debt by around $12 million while strengthening its overall capital structure.
What are the terms of the newly issued Senior Secured Second Lien Notes?
The newly issued notes will have an 8.00% interest rate and are due on January 1, 2028.
Who are the advisors involved in this transaction?
Moelis & Company LLC acted as the financial advisor, while Sullivan & Cromwell LLP served as the legal advisor for B. Riley Financial regarding this agreement.
How many common shares can the investor purchase through these warrants?
The investor may acquire approximately 40,000 common shares at an exercise price of $10.00 per share over a period of seven years.
What services does B. Riley Financial offer?
B. Riley Financial provides a wide array of services including investment banking, financial consulting, corporate restructuring, and private wealth management, tailored to client needs.
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