Fitch Ratings has assigned a 'BBB+' rating to Hasbro, Inc.'s (Hasbro) new 30 year, $500 million 6.35% notes maturing on March 15, 2040. Management intends to use the proceeds, subject to market conditions, to effectively replace the $249.8 million convertible debenture due 2021 and retire into treasury the number of shares resulting from the potential conversion of these debentures. Hasbro ended its Dec. 31, 2009 fiscal year with leverage (debt/EBITDA) of 1.5 times (x). Although this transaction increases leverage on a pro forma basis to 2.1x, upon conversion pro forma leverage would be just 1.8x. Fitch expects the company's leverage to revert back to the public leverage goals of 1.5x in the near term.
These notes, issued under the indenture dated March 15, 2000, contain added protection for bondholders in the form of a repurchase upon a change of control triggering event. The provision provides that if there is a change of control which is defined to include a person who becomes a beneficial owner of more than 50% of the outstanding voting shares among others, and, each of the three rating agencies downgrades Hasbro below investment grade as a result of this change, then an offer will be made to repurchase all or any part of the notes at 101% of the aggregate principal amount plus accrued and unpaid interest.
Hasbro, with 2009 revenues of $4.1 billion, has strong credit metrics with modest leverage and pro forma EBITDA/interest of 8.2x. The company has considerable liquidity with $636 million in cash, an unutilized $300 million revolving credit facility, and an unutilized $250 million accounts receivable securitization facility. Further, Hasbro has no debt maturities until 2014.
Fitch currently rates Hasbro as follows:
--Issuer Default Rating (IDR) at 'BBB+';
--Unsecured bank facility at 'BBB+',
--Senior notes at 'BBB+'.
The Rating Outlook is Stable.
Additional information is available at www.fitchratings.com.
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Contacts:
Fitch Ratings, New York
Grace Barnett, CPA, 212-908-0718
Thomas
P. Razukas, CFA, 212-908-0223
or
Media Relations:
Cindy
Stoller, 212-908-0526
Email: cindy.stoller@fitchratings.com
