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The $500M debt offering is a smart move by HAS. While a continually rising debt balance can certainly be a bad thing, it is critically important to understand why a company is borrowing money prior to passing judgment.

Here is the "Use of Proceeds" section of the debt prospectus:

"As part of our overall debt management strategy and in furtherance of our targeted capital structure, we intend, subject to market and other conditions, to effectively replace our outstanding 2.75% convertible debentures due 2021 with the notes issued hereby by using the net proceeds from this offering to repurchase and retire into treasury the number of shares resulting from the potential conversion of these debentures in order to offset the dilutive impact of such conversion. Any such share repurchase would be made in the open market pursuant to our share buyback program, the size of which we may choose to increase from previously announced levels. As of December 27, 2009, we had approximately $249.8 million in principal amount of these debentures outstanding... To the extent the net proceeds are not fully utilized by the foregoing, we plan to use the remaining net proceeds for general corporate and working capital purposes, which may include (but are not limited to) repayment of our indebtedness (including redemption of our convertible debentures to the extent they are not converted into our common stock), capital expenditures, acquisitions and additional repurchases of shares of our common stock."

So, HAS is using the incredibly attractive interest rates out there to redeem existing convertible debt (and/or repurchase shares). The net result is more favorable for shareholders of the company.

I'd definitely suggest reading SEC filings prior to jumping to any conclusions that would cause you to buy or sell shares in any stock. In the long run, it will save you a lot of money!

Long HAS
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