Fitch downgrades Mattel

Fitch Ratings said it downgraded Mattel, Inc.'s long-term issuer default rating to B- from B+.

The outlook is negative.

The agency said the downgrade reflects reduced confidence in Mattel's turnaround prospects following disappointing results in the first half of 2018, which continued to show material year-over-year EBITDA declines compared with expectations of stabilization.

“While Mattel successfully addressed near-term seasonal liquidity needs through a new ABL revolver in December 2017 and $1 billion issuance of guaranteed notes, the negative outlook reflects concern that weak operating results and persistently negative FCF could limit Mattel's ability to refinance upcoming maturities, including $250 million unsecured notes in 2020 and $350 million unsecured notes in 2021, as well as the company's $1.6 billion ABL revolver maturing in June 2021,” Fitch said in a news release.

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