UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 11, 2005
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HASBRO, INC.
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(Exact name of registrant as specified in its charter)
RHODE ISLAND 1-6682 05-0155090
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
1027 NEWPORT AVE., PAWTUCKET, RHODE ISLAND 02862
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(Address of Principal Executive Offices) (Zip Code)
(401) 431-8697
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On March 11, 2005, Hasbro, Inc. ("Hasbro" or the "Company"), and its
subsidiary Hasbro SA, entered into a First Amendment (the "Amendment") to
the Company's Third Amended and Restated Revolving Credit Agreement, dated
November 14, 2003 (the "Revolving Credit Agreement"). The Amendment
implemented a number of changes to the Revolving Credit Agreement and was
executed by all of the Banks party to the Revolving Credit Agreement. In
addition to implementing the changes described below, the Amendment
replaced Fleet National Bank, as the lenders' agent under the Revolving
Credit Agreement, with Bank of America, N.A. (as successor in interest to
Fleet National Bank). The Revolving Credit Agreement was previously filed
as exhibit 4(d) to the Company's Annual Report on Form 10-K for the year
ended December 28, 2003.
First, the Amendment reduced the interest rate margin and the
commitment fee rates on syndicated loans for many pricing levels. As an
example, while the Company is rated for Level IV pricing (BBB-/Baa3/BBB-),
which is the Company's current rating, or Level V pricing (BBB/Baa2/BBB),
which would represent an upgrade of one level, each of the interest rate
margin on Eurocurrency loans, and the commitment fee rate, are reduced by
0.05%. Other pricing adjustments apply to other rating levels. Ratings
under the Revolving Credit Agreement are based on the ratings by at least
two of Fitch Ratings, Moody's or Standard & Poor's, respectively.
Second, the Amendment eliminated the provisions of the Revolving
Credit Agreement which provided the lenders with a security interest in
certain of the Company's assets if the Company failed to maintain specified
financial ratios, or if the Company's credit rating fell below designated
levels.
Third, the Revolving Credit Agreement provided for a committed
borrowing facility of $350 million. However, the original agreement
provided that this borrowing facility would be reduced by $50 million on
each of March 31, 2005 and November 30, 2005. The Amendment eliminated
this step down in the size of the overall borrowing facility, leaving the
commitment at $350 million.
Fourth, the Revolving Credit Agreement restricted the redemption or
repurchase of outstanding shares of the Company's capital stock based upon
an interest coverage test and a consolidated leverage test for the Company.
The Amendment replaced these tests with provisions stating that the Company
is allowed to redeem or repurchase outstanding capital stock, or make
distributions in respect of shares of its outstanding capital stock, as
long as the Company's debt to capitalization ratio, computed in accordance
with the Amendment, does not exceed 30%. The impact of this change is to
increase the ability of the Company to repurchase shares of its capital
stock or make distributions in respect of shares of its capital stock.
Fifth, the Amendment liberalized the Company's ability to make
acquisitions, increasing the amount permitted for acquisitions from $50
million per year ($100 million per year if the Company's debt is rated
investment grade) to a new limit of $400 million per year (provided the
Company's debt to capitalization ratio, computed in accordance with the
Amendment, does not exceed 30%).
Finally, the Amendment eliminated from the Revolving Credit Agreement
a requirement that the Company maintain a specified minimum EBITDA level in
order to be able to borrow under the facility.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HASBRO, INC.
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(Registrant)
Date: March 15, 2005 By: /s/ David D. R. Hargreaves
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David D. R. Hargreaves
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)