B. Riley Financial Reduces Debt by Approximately $18 Million via Private Bond Exchange

Rhea-AI Summary

B. Riley Financial (NASDAQ: RILY) has executed a private bond exchange agreement that will reduce its total debt by $18 million. The agreement involves exchanging $43 million in outstanding Senior Notes for $25 million in newly issued 8.00% Senior Secured Second Lien Notes due January 2028.

As part of the transaction, the company is issuing warrants to purchase approximately 98,000 common shares at an exercise price of $10.00 per share, exercisable for seven years. This marks B. Riley's fifth bond exchange in four months, collectively reducing total outstanding debt by $126 million. After the exchange, the Notes balance stands at $229 million with $21 million of remaining capacity.

Positive

• Total debt reduction of $18 million improves balance sheet strength
• Fifth successful bond exchange in four months, totaling $126 million in debt reduction
• $21 million remaining capacity for potential further debt reduction
• Restructuring of debt terms through secured notes indicates proactive financial management

Negative

• Issuance of warrants for 98,000 shares at $10.00 could lead to potential dilution
• Complex debt restructuring suggests ongoing balance sheet challenges

Insights

Corporate Finance Specialist

RILY executes $18M debt reduction through fifth bond exchange, part of broader $126M deleveraging strategy to strengthen balance sheet.

B. Riley Financial has successfully negotiated another strategic debt restructuring, reducing its outstanding obligations by $18 million through a privately negotiated exchange agreement with an institutional investor. This transaction represents the company's fifth bond exchange in just four months, contributing to a cumulative debt reduction of approximately $126 million.

The mechanics of this exchange are particularly noteworthy: the institutional investor is trading in $43 million of existing senior notes with various maturities (2026-2028) for $25 million of newly issued 8.00% Senior Secured Second Lien Notes due January 2028. Additionally, B. Riley is issuing warrants for approximately 98,000 common shares at an exercise price of $10.00 per share, exercisable over seven years.

This transaction has significant balance sheet implications. Post-exchange, B. Riley's Notes balance stands at $229 million, with $21 million of capacity remaining in this facility. Management has explicitly indicated plans to utilize this remaining capacity to further improve the balance sheet.

The structure of this exchange reveals important aspects of B. Riley's financial strategy. By exchanging $43 million in unsecured senior notes for $25 million in secured second lien notes plus equity warrants, the company is effectively trading away a portion of potential future equity value to immediately reduce debt obligations. The secured nature of the new notes provides additional protection for the new debt holder while potentially restricting B. Riley's flexibility regarding certain assets.

This systematic approach to deleveraging, demonstrated by executing five exchanges in four months, indicates a concerted effort to strengthen the company's capital structure, potentially improving debt service ratios and overall financial stability.

LOS ANGELES, July 14, 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 $18 million.

Pursuant to the Agreement and subject to the completion of certain closing procedures, the investor has agreed to exchange approximately $43 million in outstanding Senior Notes, consisting of $2 million in September 2026 notes, $20 million in December 2026 notes, $5 million in January 2028 notes, and $16 million in August 2028 notes, for $25 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 98,000 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 Notes balance is $229 million with $21 million of capacity remaining. Bryant Riley, Chairman and Co-Chief Executive Officer of BRF, said: "This marks the fifth bond exchange BRF has negotiated in four months, reducing total outstanding debt by approximately $126 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

How much debt is B. Riley Financial (RILY) reducing through its latest bond exchange?

B. Riley Financial is reducing its total debt by $18 million through exchanging $43 million in outstanding Senior Notes for $25 million in newly issued Senior Secured Second Lien Notes.

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

B. Riley has reduced its total outstanding debt by approximately $126 million through five bond exchanges completed in the past four months.

What are the terms of the warrants issued by B. Riley Financial (RILY) in the bond exchange?

B. Riley is issuing warrants to purchase approximately 98,000 common shares at an exercise price of $10.00 per share, exercisable for a period of seven years.

What is B. Riley's (RILY) remaining notes capacity after the latest exchange?

After the exchange, B. Riley's Notes balance is $229 million with $21 million of capacity remaining under their Senior Secured Second Lien facility.

What types of Senior Notes were exchanged in B. Riley's (RILY) latest debt restructuring?

B. Riley exchanged $2 million in September 2026 notes, $20 million in December 2026 notes, $5 million in January 2028 notes, and $16 million in August 2028 notes.