Hasbro, Inc. (NASDAQ:HAS) Files An 8-K Entry into a Material Definitive AgreementItem 2.03 Entry into a Material Definitive Agreement.
On November 26, 2018, Hasbro, Inc. (the “Company”), and its subsidiary Hasbro SA (together the “Borrowers”), entered into an Amended and Restated Revolving Credit Agreement (the “Amended Agreement”) with: (i) Bank of America, N.A. (“Bank of America”), as Administrative Agent, Swing Line Lender, an L/C Issuer and a Lender, (ii) Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citibank, N.A., Citizens Bank, N.A., and JPMorgan Chase Bank, N.A., as joint lead arrangers and book runners, and (iii) the other financial institutions party thereto from time to time.
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Amended Agreement. A copy of the Amended Agreement is filed as an exhibit to this Current Report on Form 8-K and the description set forth herein is qualified in its entirety by reference to the Amended Agreement.
The Amended Agreement amends and restates the Company’s Second Amended and Restated Revolving Credit Agreement, dated March 30, 2015. The Amended Agreement provides for an increased senior credit facility with maximum aggregate borrowing commitments of up to $1,100 million, and a potential additional incremental commitment increase of up to $500 million. Additionally, the Amended Agreement extends the term of the facility from March 30, 2020 to November 26, 2023 and reduces certain fees payable under the facility.
At the Borrowers’ election, the interest rates per annum applicable to Committed Loans under the Amended Agreement will be computed with reference to either a Base Rate or a Eurocurrency Rate, in each case with an applicable margin added to such underlying rate, the margin being based on the more favorable of the Company’s debt rating and the Company’s Consolidated Total Leverage Ratio.
The Base Rate is a fluctuating rate equal to the highest of (i) the Federal Funds Rate plus ½ of 1%, (ii) the rate of interest in effect by Bank of America as its prime rate and (iii) the Eurocurrency Rate for a one-month interest period plus 1%; and if the Base Rate shall be less than zero, such rate shall be deemed zero for purposes of the Credit Agreement.
The Eurocurrency Rate is measured by reference to an adjusted London inter-bank offered rate, or “LIBOR”, if the borrowing is denominated in a LIBOR quoted currency. The Amended Agreement sets forth specific computations for the Eurocurrency Rates for borrowings made in Canadian, Australian or New Zealand dollars. If the applicable Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of the Credit Agreement.
Based on the Company’s current debt ratings of BBB by S&P, Baa1 by Moody’s and BBB+ by Fitch, the current margin on Base Rate loans is 0.125% and on Eurocurrency Rate loans is 1.125% under the Amended Agreement.
The Company pays a commitment fee on the available unused committed borrowing capacity under the facility. The fee is based on the more favorable of the Company’s debt rating and the Company’s Consolidated Total Leverage Ratio.
The Amended Agreement provides for Swing Line Borrowings of up to $50 million and the issuance of letters of credit in individual amounts of up to $18.75 million and aggregate combined amounts of up to $75 million.