B. Riley Financial's Strategic Bond Exchange to Cut Debt by $46 Million and Improve Capital Structure

B. Riley Financial's Debt Reduction Milestone

B. Riley Financial, Inc. (NASDAQ: RILY) has made headlines with a significant move to enhance its capital structure through a private bond exchange aimed at reducing its outstanding debt by nearly $46 million. This move comes as part of a broader strategy to address and stabilize the company's financial standing in the market.

On May 21, 2025, B. Riley Financial announced that it had entered into a privately negotiated agreement with an institutional investor. Under this agreement, the investor will exchange approximately $139 million in Senior Notes. This exchange involves notes maturing in March and December 2026, as well as in January 2028. In return, B. Riley will issue new 8.00% Senior Secured Second Lien Notes set to mature on January 1, 2028, amounting to $93 million. Additionally, the investor will receive warrants that allow them to purchase about 372,000 common shares at a price of $10.00 per share over the next seven years.

Significance of the Bond Exchange

This bond exchange represents a crucial step in B. Riley's ongoing efforts to refine its capital structure. The company's Chairman and Co-CEO, Bryant Riley, emphasized that this is the largest exchange to date, resulting in a reduction of over $100 million in 2026 maturities. This not only reflects progress in B. Riley's financial management but also bolsters confidence in the company's ability to meet its obligations without jeopardizing its operational capabilities.

Riley further noted, “We’ve made significant progress addressing our capital structure over the past several months as we’ve negotiated three bond exchanges to reduce our total outstanding debt by approximately $93 million.” The implications of this debt reduction are paramount, especially in terms of alleviating near-term financial pressures and positioning the company for future growth.

Financial Advisory and Legal Support

This strategic exchange could not have been possible without the expertise of financial advisor Moelis & Company LLC and the legal guidance of Sullivan & Cromwell LLP. Their involvement underscores the complexity of financial restructuring and the importance of expert insight in navigating such agreements.

About B. Riley Financial

B. Riley Financial is a diversified financial services firm, adept at providing tailored solutions that meet the operational, capital, and strategic needs of its clients. The company offers a wide array of services through its various subsidiaries, including investment banking, private wealth management, and corporate restructuring, among others. This multi-platform approach allows B. Riley to support its clients in achieving their business goals, creating a collaborative environment that enhances value at every business stage.

Looking Forward

As B. Riley Financial continues to implement its strategies, further opportunities to improve its balance sheet may arise, leveraging its remaining capacity under the Senior Secured Second Lien facility. Investors and stakeholders will surely be keeping a close eye on the company’s next moves, as it demonstrates resilience and strategic foresight in a competitive financial landscape.

In conclusion, the recent bond exchange is not merely a transactional shift; it symbolizes B. Riley Financial's commitment to enhancing its financial health and paving the way for sustainable growth. As the company prepares for future initiatives, this underlying strength will be critical in maintaining investor confidence and driving business success.