B. Riley Financial Announces Partial Redemption of 6.75% Senior Notes due 2024
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Insights
The decision by B. Riley Financial, Inc. to initiate a partial redemption of its Senior Notes is a strategic financial maneuver that can have several implications for the company's fiscal health and investor sentiment. By redeeming a portion of its debt before maturity, the company is likely aiming to reduce interest expenses and improve its debt-to-equity ratio, which is a positive signal to investors regarding the company's proactive debt management.
From a cash flow perspective, this action suggests that B. Riley has sufficient liquidity to manage its obligations, which could be viewed favorably by credit rating agencies and investors. However, it's important to note that the redemption will be at 100% of the principal amount, plus accrued interest. This could imply a significant cash outflow that might affect the company's short-term liquidity position.
Long-term benefits might include a potentially improved credit rating and a reduced cost of capital, which can facilitate future financing at more favorable terms. Investors holding the Notes till maturity will need to reassess the impact of this redemption on their investment returns, especially if they were counting on the interest income from the full principal amount till the original maturity date.
By analyzing the partial redemption of Senior Notes by B. Riley, it's evident that the company is adhering to its credit facility's covenant, which requires the redemption of debt amounts exceeding a certain threshold prior to the maturity date. This compliance indicates a disciplined approach to debt management and covenant adherence, which is reassuring for debt investors and can enhance the company's reputation in the debt market.
However, the market's reaction to such redemptions can be mixed. While it reduces the amount of debt in circulation, which can be a positive sign of financial strength, it also removes a fixed-income investment option from the market, potentially driving investors towards other securities. This could affect the liquidity and market demand for the remaining Notes.
Furthermore, the timing and terms of the redemption are standard, with the redemption price set at par plus accrued interest. This is a common practice that aligns with market norms and provides a clear exit for investors without the uncertainty that can come with market-price-based redemptions.
From an investor relations standpoint, B. Riley's announcement of the partial redemption is a significant event that necessitates clear communication with the Noteholders. It is crucial to ensure that the investors understand the rationale behind the redemption, its timing and the process for receiving the Redemption Payment.
Investors will be keen to understand the impact of this redemption on their investment and the company's future financial strategy. The fact that interest on the redeemed Notes will cease to accrue post-Redemption Date needs to be highlighted to avoid any confusion. Additionally, the company should be prepared to address inquiries regarding the use of freed-up capital and any potential impact on future dividend policies or investment strategies.
Ensuring transparency and maintaining open channels of communication will help mitigate any potential concerns or misunderstandings among investors, which is essential for maintaining investor confidence and supporting the company's stock price stability.
The redemption price is equal to
The Notes are listed on NASDAQ under the ticker symbol "RILYO" and mature on May 31, 2024 (the "Maturity Date"). The aggregate principal amount of the Notes currently outstanding is approximately
Investors in the Notes should contact the bank or broker through which they hold a beneficial interest in the Notes for information about the Redemption Payment.
This press release is for informational purposes only and shall not constitute a notice of redemption of the Notes or an offer to purchase, or a solicitation of an offer to sell, any Notes or other securities.
About B. Riley Financial
B. Riley Financial is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. B. Riley leverages cross-platform expertise to provide clients with full service, collaborative solutions at every stage of the business life cycle. Through its affiliated subsidiaries, B. Riley provides end-to-end, collaborative 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. B. Riley opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. B. Riley 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 in this press release that are not descriptions of historical facts are forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. 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 the date of this press release. Such forward-looking statements include, but are not limited to, statements regarding the terms and conditions and timing of redemption of these Notes. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Factors that could cause actual results to differ include (without limitation) the Company's financial performance; and those risks described from time to time in B. Riley Financial's periodic filings with the SEC, including, without limitation, the risks described in B. Riley Financial's Annual Report on Form 10-K for the year ended December 31, 2022 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Additional information is also set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. 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 B. Riley Financial undertakes no duty to update this information.
Contact | |
Investors | Media |
Mike Frank | Jo Anne McCusker |
ir@brileyfin.com | press@brileyfin.com |
(212) 409-2424 | (646) 885-5425 |
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SOURCE B. Riley Financial
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