Hasbro enters $1 billion term loan, $1.5 billion restated revolver

By Wendy Van Sickle

Columbus, Ohio, Sept. 24 – Hasbro, Inc. entered into a $1 billion term loan agreement and an up to $1.5 billion amended and restated revolving credit agreement on Sept. 20, according to an 8-K filing with the Securities and Exchange Commission.

For each credit agreement, BofA Securities, Inc., JPMorgan Chase Bank, NA, Citibank, NA and Citizens Bank, NA are the joint lead arrangers and bookrunners.

Bank of America NA is the administrative agent. JPMorgan, Citibank and Citizens are the co-syndication agents.

Term loan

The $1 billion is spread over two tranches, including a $400 million three-year senior unsecured term loan facility and a $600 million five-year senior unsecured term loan facility.

For the three-year loan, borrowings bear interest at Libor plus a margin ranging from 87.5 basis points to 175 bps, depending on credit ratings.

For the three-year loan, borrowings bear interest at Libor plus a margin ranging from 100 bps to 187.5 bps, also depending on credit ratings.

Loans under the five-year tranche will require principal amortization payments that will be payable in equal quarterly installments of 5% per annum of the original principal amount for each of the first two years after funding, increasing to 10% per annum of the original principal amount for each subsequent year.

Hasbro must maintain a minimum interest coverage ratio of 3x and a maximum leverage ratio of 5.65x or 5.4x, depending on gross proceeds of equity securities issued, with periodic step-downs to 3.5x for the fiscal quarter ending Dec. 31, 2023 and onwards.

Proceeds may be used to fund a portion of the company’s acquisition of Entertainment One Ltd. in an all-cash transaction is valued at about $4 billion.

Revolver

The amended and restated revolver comprises $1.1 billion of commitments funded immediately and $400 million of additional commitments that may become effective at any time prior to Dec. 31, subject to the consummation of the Entertainment One acquisition.

The amended agreement also provides for a potential incremental increase of up to $500 million.

Additionally, the revolver’s term was extended to Sept. 20, 2024 from Nov. 26, 2023.

There is a $75 million sublimit for letters of credit and a $50 million sublimit for swingline loans.

Prior to the date that the additional commitments become available, revolver borrowings bear interest at Libor plus a margin ranging from 87.5 bps and 150 bps. After the additional commitments become available, the margin will range from 87.5 bps to 162.5 bps. In each case, the margin may be based on either credit ratings or leverage ratio.

Hasbro is a toy and game company based in Pawtucket, R.I. Entertainment One is a multinational mass media and entertainment company based in Toronto.

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