Mattel talks $1 billion eight-year senior notes to yield 6¾%-7%; pricing Friday

By Paul A. Harris

Portland, Ore., Dec. 14 – Mattel, Inc. talked its $1 billion offering of eight-year senior notes (Ba2/BB-/BB) to yield 6¾% to 7%, according to market sources.

Official talk comes in line with early guidance in the high 6% to 7% area.

The deal, coming on the back of recent credit ratings downgrades that saw the company slip into the speculative-grade range from its former investment-grade status, and a subsequent sell-off in its existing bonds, is playing to both investment-grade and high-yield accounts, according to a trader, who added that the order book is believed to be in decent shape.

The Rule 144A and Regulation S notes are set to price on Friday.

BofA Merrill Lynch, Citigroup Global Markets Inc., Wells Fargo Securities LLC, MUFG, RBC Capital Markets LLC, Mizuho Securities and HSBC Bank are the joint bookrunners.

The notes come with three years of call protection.

The El Segundo, Calif.-based toy manufacturer plans to use the proceeds plus cash on hand to pay off its 1.7% senior notes due 2018 upon or before maturity, to pay off its commercial paper program and to pay off its revolving credit facility.

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