This excerpt taken from the HAS 10-K filed Mar 9, 2005.
At December 26, 2004, Hasbro had available an unsecured committed line and unsecured uncommitted lines of credit from various banks approximating $350,000 and $185,900, respectively. A significant portion of the short-term borrowings outstanding at the end of 2004 and 2003 represent borrowings made under, or supported by, these lines of credit. The weighted average interest rates of the outstanding borrowings were 3.9% for both years. The Company had no borrowings outstanding under its committed line of credit at December 26, 2004. During 2004, Hasbro's working capital needs were fulfilled by cash generated from operations, borrowing under lines of credit, and the Company's accounts receivable securitization program. Borrowings under the lines of credit were on terms and at interest rates generally extended to companies of comparable creditworthiness.
The Company's committed revolving credit facility of $350,000 matures in March 2007. The credit facility reduces by $50,000 effective March 31, 2005, and by a further $50,000 effective November 30, 2005. The Company is not required to maintain compensating balances under the agreement. The Company pays a fee (currently .25%) based on the unused portion of the facility and interest equal to Libor or Prime plus a spread (currently 1.25% or 0.00%, respectively) on borrowings under the facility. The amount of the spread to Libor or Prime varies based on the
Company's long-term debt ratings. If the Company fails to maintain certain financial ratios or if the credit rating of the Company drops below BB or Ba3, borrowings under the agreement would be secured by substantially all domestic inventory as well as certain intangible assets.
The agreement contains certain restrictive covenants setting forth minimum cash flow and coverage requirements, and a number of other limitations, including restrictions on capital expenditures, investments, acquisitions, share repurchases, incurrence of indebtedness, and dividend payments. The Company was in compliance with all covenants as of and for the year ended December 26, 2004.