Terms

Series

7.375% Series B Cumulative Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

7.375%

Rate Type

Fixed

Annual Dividend

$1.84

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

September 4, 2025

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of B. Riley Financial, Inc., All Indebtedness And Other Liabilities Of Subsidiaries, Any Equity Securities Expressly Designated As Senior To Series B Preferred Stock (None Currently Outstanding); Pari Passu With: 6.875% Series A Cumulative Perpetual Preferred Stock, Any Future Equity Securities Expressly Designated As Parity With Series B Preferred Stock; Senior To: Common Stock, All Equity Securities Expressly Designated As Junior To Series B Preferred Stock

Regulatory (Basel III) Call

No

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

1,300,000

Prospectus Summary

B. Riley Financial, Inc. (NASDAQ: RILY) is offering 1,300,000 depositary shares, each representing a 1/1000th fractional interest in a share of its 7.375% Series B Cumulative Perpetual Preferred Stock, at a liquidation preference of $25.00 per depositary share. The fixed annual dividend of $1.84375 per depositary share ($0.4609 per quarter) is payable on or about the last day of January, April, July, and October, with the first payment due October 31, 2020. The shares are callable at par on or after September 4, 2025. This security is cumulative, meaning unpaid dividends accrue and must be paid in full before any dividends can be paid on common stock or junior securities. The Series B Preferred Stock ranks senior to B. Riley's common stock and all junior equity, and on parity with the existing 6.875% Series A Cumulative Perpetual Preferred Stock. However, it is effectively junior to all existing and future indebtedness of B. Riley Financial, Inc. (including over $850 million of senior notes and a term loan as of June 30, 2020) and is structurally subordinated to all liabilities of the company's operating subsidiaries, which are separate legal entities with no obligation to upstream funds to service preferred dividends. There is no regulatory capital call provision, as B. Riley is not a bank holding company. Special optional redemption rights exist only upon a Delisting Event or Change of Control. At the $25.00 offering price, the Series B Preferred Stock yields 7.375% annually. Dividends on this C-corporation preferred stock are expected to qualify for the preferential qualified dividend income (QDI) tax rate (15%/20%) for individual holders and the dividends-received deduction (DRD) for eligible corporate holders, subject to applicable holding period requirements. Record dates are set by the Board between 10 and 30 days before each payment date. The dividend stopper provision prevents the company from paying dividends on common stock or parity/junior equity while Series B dividends are in arrears; additionally, debt covenants or legal restrictions could temporarily block actual cash payment even though dividends continue to accumulate.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Series B Preferred Stock dividends are unpaid or in arrears, the issuer may not pay dividends on its common stock or any other junior or parity equity securities (except stock dividends payable in junior stock).

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 72 (Strong)