SUPERNEWS

Macro

Hasbro's First Bond Sale in 4 Years Amid 20% Staff Cut, Market Surge

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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5/8, 12:44 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
Bank of America Corporation
Bank Nova Scotia Halifax Pfd 3
Blackstone Inc.
Citigroup, Inc.
Hasbro, Inc.
JP Morgan Chase & Co.
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Key Takeaway

  • Hasbro Inc. initiates its first bond sale since 2019, aiming to raise debt with 10-year notes potentially yielding 1.8 points above Treasuries.
  • The move follows a successful Q1 earnings report and a major staff reduction of 20%, signaling aggressive turnaround efforts.
  • This bond sale is part of a larger trend, with 42 high-grade deals this week surpassing early January's activity in the investment-grade market.

Hasbro Joins Debt Market Wave

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.

Strategic Divestitures and Acquisitions

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%.

Record-Breaking Week in Investment-Grade Market

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.