Macro
Hasbro issues first bonds in nearly five years, joining a record-breaking week in the US investment-grade market.
By Max Weldon
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Hasbro Inc., the renowned maker of Monopoly and Dungeons & Dragons, is issuing debt for the first time in nearly five years. This move places Hasbro among a group of blue-chip companies capitalizing on the current bustling US investment-grade market. The company is offering 10-year bonds aimed at supporting general corporate purposes, with the notes potentially yielding 1.8 percentage points above Treasuries. This strategic financial maneuver follows Hasbro's recent announcement of surpassing first-quarter earnings expectations, signaling a positive trajectory in its turnaround efforts.
In a bid to streamline its operations and focus on core business areas, Hasbro has been actively engaging in the sale of divisions it deems non-essential. Notably, the company sold Entertainment One Ltd.'s (EOne) music business to Blackstone Inc. for $385 million in 2021 and agreed to sell EOne's film and TV studio to Lions Gate Entertainment Corp. for $375 million in cash, in addition to the assumption of loans in August. These divestitures are part of Hasbro's broader strategy to recover from the sales slump experienced during the critical holiday season, which led to the company announcing a significant workforce reduction of about 20%.
Hasbro's bond issuance coincides with an exceptionally active week in the US investment-grade market, marking the busiest week of the year with 42 deals so far. This surge surpasses the previous record set during the first week of the year, which is traditionally one of the most active periods. The company's decision to enter the market at this time is indicative of a broader trend among high-grade companies seeking to capitalize on tight spreads and favorable borrowing conditions. The bond sale is being managed by leading financial institutions, including Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., and Bank of Nova Scotia.
Finance GPT
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