#United States #Los Angeles #B. Riley Financial #Debt Reduction #Private Bond Exchange

Major Debt Reduction by B. Riley Financial

B. Riley Financial, Inc., identified on NASDAQ as RILY, has made strides in its financial strategy by recently announcing a significant debt reduction of around $15 million. This move is part of a privately negotiated agreement designed to enhance the company's capital structure. The exchange agreement involves an institutional investor and aims to further optimize the company's financial position amidst challenging market conditions.

Details of the Exchange Agreement

The details of the deal reveal that the institutional investor will exchange approximately $28 million in outstanding Senior Notes. This includes:

• - $8 million due in December 2026
• - $2 million due in January 2028
• - $18 million due in August 2028

In return, B. Riley Financial will issue $13 million in newly created 8.00% Senior Secured Second Lien Notes, which are scheduled to mature by January 1, 2028. This strategic swap not only reduces immediate debt obligations but also structures future repayment in a more manageable way.

Additionally, as part of the deal, the company will issue warrants allowing the investor to purchase approximately 52,000 common shares at an exercise price of $10.00 per share. These warrants can be exercised over the next seven years, adding an interesting avenue for future investment by the institutional partner.

Post-exchange, B. Riley will carry approximately $204 million in remaining Notes and an additional $46 million of debt capacity. This positions the company for more strategic maneuvers in the coming months.

Comments from Leadership

Bryant Riley, the Chairman and Co-CEO of B. Riley Financial, remarked on the importance of this financial maneuver. He emphasized that this marks the fourth bond exchange that B. Riley has successfully negotiated within a three-month period. Collectively, these negotiations have facilitated a total outstanding debt reduction of about $108 million. He stated, "Addressing our capital structure remains a priority, and we expect to utilize our remaining capacity under the Senior Secured Second Lien facility to further enhance our balance sheet."

Financial Advisory Support

In facilitating this complex transaction, B. Riley Financial received expertise from Moelis & Company LLC, which acted as their financial advisor. Legal guidance came from Sullivan & Cromwell LLP, ensuring that all aspects of the agreement complied with regulatory requirements.

This private bond exchange is a critical step as B. Riley Financial continues to seek instruments that afford flexibility while enabling growth opportunities. The move underscores a proactive approach in an ever-evolving financial landscape.

About B. Riley Financial

B. Riley Financial is a diversified financial services entity that caters to the diverse operational and capital needs of its clients through its various subsidiaries and affiliated partners. Offering a comprehensive suite of services, B. Riley focuses on investment banking, institutional brokerage, private wealth and investment management, and corporate restructuring solutions among others. The company has a reputation for seizing opportunities that align with enhancing shareholder value, including originating and underwriting secured loans to asset-wealthy companies.

As B. Riley Financial moves forward post-exchange, all eyes will be on how it navigates its financial landscape, especially with its keen focus on capital restructuring and overall growth.