S&P rates Mattel notes BB-

S&P said it assigned its BB- issue-level rating and 3 recovery rating to Mattel Inc.’s planned $600 million senior unsecured guaranteed notes due 2027. The 3 recovery rating indicates S&P’s expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

Mattel plans to use the proceeds to redeem $250 million senior notes without guarantees due 2020 and $350 million senior notes without guarantees due 2021.

Mattel’s BB- rating is unchanged. “This is despite the company’s recent announcement it would restate its 2017 financial statements related to a recognition timing error of a tax-expense item, material weaknesses in internal control over financial reporting, its need to undertake a series of remedial actions, and its decision to replace its chief financial officer (CFO),” S&P said in a press release.

The outlook is negative.

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