B. Riley Financial Streamlines Debt Structure with Key Exchange
B. Riley Financial Streamlines Debt Structure
B. Riley Financial, Inc. (NASDAQ: RILY) has announced a significant move to enhance its financial position by engaging in a private bond exchange that aims to reduce its total outstanding debt by approximately $35 million. This initiative reflects the company's ongoing commitment to optimizing its capital structure and supporting long-term growth.
Details of the Exchange Agreement
The company has entered into a privately negotiated exchange agreement with an institutional investor. This arrangement is designed to exchange approximately $123 million of outstanding Senior Notes of various maturities for newly issued financial instruments. Notably, this includes exchanging around $86 million in 5.5% Senior Notes due in 2026 and approximately $37 million in 5.0% Senior Notes due in 2026.
Significance of the New Notes
The investor involved in this exchange will receive approximately $88 million in newly issued 8.00% Senior Secured Second Lien Notes, which are set to mature in 2028. Additionally, as part of this agreement, the investor will also be granted warrants to purchase roughly 351,000 common shares at an exercise price of $10.00 each. These warrants are valid for seven years, providing the investor with a considerable opportunity for future returns.
Management's Perspective
Bryant Riley, the Chairman and Co-Chief Executive Officer of B. Riley Financial, expressed that this exchange is a pivotal step in refining the company's capital structure. He emphasized the company's continued efforts to identify strategic opportunities for further transactions that could leverage existing capacities and enhance financial stability.
Collaborative Support
To facilitate this agreement, B. Riley Financial enlisted the expertise of Moelis & Company LLC as a financial advisor and Sullivan & Cromwell LLP for legal guidance. The institutional investor was advised by Seaport Global Securities LLC, ensuring that both parties had robust representation throughout the process.
About B. Riley Financial
B. Riley Financial is a comprehensive financial services firm that delivers a wide range of tailored solutions to cater to the diverse needs of its clients. The company offers collaborative financial services across multiple sectors, including investment banking, brokerage, wealth management, and corporate finance. With a focus on growth and adaptability, B. Riley Financial supports businesses at all stages of their lifecycle. Balance sheet health is a top priority for the firm, and it actively seeks investment opportunities that benefit its shareholders.
Future Outlook
As B. Riley Financial embarks on this strategic exchange, the firm stands well-positioned to enhance its financial agility. By focusing on debt reduction through efficient agreements, the company aims to bolster its competitive edge while ensuring optimal governance and investment strategies. Continued monitoring of market conditions and investor interests will play a crucial role in the success of these initiatives.
Frequently Asked Questions
What is the purpose of B. Riley Financial's bond exchange?
The bond exchange aims to reduce the company's outstanding debt by approximately $35 million, promoting overall financial health.
Who was involved in the exchange agreement?
B. Riley Financial negotiated the exchange agreement with an institutional investor, securing the support of Moelis & Company LLC and Sullivan & Cromwell LLP.
What are the terms of the new financial instrument issued?
The new financial instrument consists of 8.00% Senior Secured Second Lien Notes due in 2028, along with warrants to purchase common shares.
How does this exchange impact shareholders?
This exchange is expected to enhance B. Riley's balance sheet and financial capabilities, ultimately benefiting shareholders through increased stability and growth potential.
What sectors does B. Riley Financial operate in?
B. Riley Financial operates across various sectors, including investment banking, private wealth management, and financial consulting, offering comprehensive services tailored to clients' needs.
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