Moody’s upgrades Hasbro to Baa1

Moody's Investors Service said it upgraded Hasbro, Inc.'s senior unsecured rating to Baa1 from Baa2, senior unsecured shelf rating to provisional Baa1 from provisional Baa2 and subordinate shelf rating to provisional Baa2 from provisional Baa3.

The outlook is stable.

"The upgrade reflects Hasbro's solid financial metrics and our expectation that the company will sustain strong operating momentum after years of repositioning its strategy to emphasize owned and controlled brands. We expect Hasbro will continue to successfully engage consumers through product innovation, storytelling and entertainment," Moody’s senior vice president Linda Montag said in a news release.

"The upgrade also reflects the company's greater scale and more balanced portfolio which now includes a robust line-up of girls products, both owned as well as partner brands including the Disney Princess and Frozen lines as of the beginning of 2016."

The upgrade reflects the agency’s expectation that Hasbro will maintain debt/EBITDA leverage (by the company's definition) within its stated target range of 2 times to 2.5 times. Although Moody's said it cannot rule out that Hasbro will make select investments to enhance its digital and content creation capabilities, it expects that the company will consider any such investments within the context of its articulated leverage targets.

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