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Fitch downgrades Mattel to B+
Fitch Ratings said it downgraded Mattel, Inc.'s long-term issuer default rating to B+ from BB.
The outlook is negative.
Fitch said the downgrade reflects its expectations of a significantly slower than previously anticipated recovery in Mattel's EBITDA and FCF following weaker than projected 2017 results.
“EBITDA in 2018 could remain near 2017 adjusted levels of around $300 million and improve toward the low-$500 million range by 2020, compared with Fitch's prior expectations of EBITDA around $650 million in 2020,” the agency said in a news release.
“Leverage, which was around 11.0x in 2017 (adjusted for Mattel's 1Q18 $250 million debt paydown), could improve toward the mid-5.0x range by 2020, assuming around 75% EBITDA improvement from 2017/2018 levels.
The negative outlook reflects the agency’s decreased confidence in the company's ability to stabilize sales and push substantial EBITDA improvement in line with Fitch's rating case.
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