Hasbro cuts bond sale

Hasbro cuts bond sale to $350 million after initially planning a $600m issue.
Publish date:

The company had planned to sell $600 million of debt, including 30-year bonds, according to one source. It will be the first time since March 2000 that it has used the bond market. The firm plans to use proceeds from the sale to repay debt under its revolving credit line, the company said in a filing with the US Securities and Exchange Commission.

“There’s a finite amount of resources to do the credit analysis on these deals,” said Ira Jersey, credit strategist at Credit Suisse Group in New York. “With a name like Hasbro, which investors don’t have a lot of information on, they would rather do it on a name they’re more familiar with.”

The debt includes a so-called "poison put" that would allow investors to sell the bonds back at 101 cents on the dollar if there were a change of control at Hasbro and a ratings cut to below investment grade.

Hasbro last sold 10-year and 30-year corporate debt in July 1998, when it issued $300 million of bonds, according to data compiled by Bloomberg.

The new 6.3-percent 10-year notes were priced to yield 200 basis points more than US Treasuries of similar maturity, according to data compiled by Bloomberg. The yield premium is 130 basis points more than Hasbro paid on similar debt it sold nine years ago.

The sale was split evenly between 6.15-percent 10-year notes that priced to yield 70 basis points more than Treasurys of similar maturity and 6.6-percent 30-year bonds with a yield premium of 90 basis points. A basis point is 0.01 percentage point. Those bonds were originally rated A2 by Moody’s and A by S&P.

“These are the times when sometimes the little guy gets squeezed out, but they were still able to get funding,” Jersey said.



Radica sale looming?

A sale of Radica could be on the cards after the company appointed an advisor to explore a number of “strategic alternatives” as it looks to stimulate some movement in its share price.

Featured Jobs