B. Riley secures $160 million Oaktree debt facility

LOS ANGELES - B. Riley Financial, Inc. (NASDAQ: RILY), a diversified financial services company with a market capitalization of $172 million, has secured a new $160 million senior secured debt facility with Oaktree Capital Management, L.P. The company’s stock has shown remarkable momentum, surging 83% in the past week and 23% year-to-date. According to InvestingPro, which offers 10+ additional real-time insights for RILY, the stock currently appears overvalued based on its Fair Value analysis. The funds from this facility were used to retire an existing Nomura credit agreement and to invest in a joint venture overseeing the liquidation of JOANN fabric and crafts stores.

The facility, provided by funds managed by Oaktree, has enabled B. Riley to pay off approximately $118 million of debt under its Nomura Senior Secured Credit Agreement. The company maintains strong liquidity with a current ratio of 4.17, indicating its liquid assets exceed short-term obligations. The remaining capital will serve as working capital and support B. Riley’s share of a loan and investment in the joint venture tasked with liquidating JOANN’s inventory. The retailer is closing all 790 locations nationwide, with the liquidation expected to be finalized in about 12 weeks.

This strategic move comes as GA Group, a firm with a 44 percent ownership stake from B. Riley, was declared the winning bidder to act as JOANN’s exclusive liquidation agent following a U.S. Bankruptcy Court auction on February 26, 2025. The liquidation involves around $2 billion in retail inventory, marking one of the largest transactions in GA Group’s 40-year history.

Bryant Riley, Chairman and Co-CEO of B. Riley Financial, highlighted the new credit agreement with Oaktree as a pivotal development for the company, providing increased financial and strategic flexibility. He emphasized the significance of the JOANN liquidation as an early success of their partnership with Oaktree in the GA Group venture.

The Term Loan Facility carries an interest rate of the three-month SOFR plus 8.00%. Additionally, B. Riley issued Oaktree warrants to purchase 1,832,290 common shares at an exercise price of $5.14 per share, a 20 percent premium over the 30-day VWAP before the warrants were issued, exercisable for seven years from the date of issuance.

B. Riley is set to report preliminary full year 2024 results on March 3, 2024, after market close, with a conference call and Q&A session scheduled for 4:30 p.m. ET on the same day. The legal advisors for this transaction were Sullivan & Cromwell LLP for B. Riley and Kirkland & Ellis LLP for Oaktree.

The information in this article is based on a press release statement.

In other recent news, B. Riley Financial has announced the suspension of dividends on its 6.875% Series A and 7.375% Series B preferred stocks. These dividends will continue to accumulate until they are fully paid. Alongside this, the company is preparing to redeem its 6.375% notes due on February 28 as scheduled. The firm’s Chairman, Bryant Riley, is focusing on reducing company debt following financial setbacks, including the bankruptcy of Franchise Group (NASDAQ:FRG), which was one of B. Riley’s significant holdings. A bankruptcy judge has indicated that the equity of Franchise Group appears to be worthless. A representative from B. Riley stated that the dividend suspension was not intended as a cash conservation measure but did not elaborate on the reasons behind this decision.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.