Mattel Inc.
07/16/2024 | Press release | Distributed by Public on 07/16/2024 14:43
Material Agreement Form 8 K
Item 1.01. Entry into a Material Definitive Agreement
New Revolving Credit Facility
On July 15, 2024, Mattel, Inc. (the "Company") entered into a revolving credit agreement (the "Credit Agreement") among the
Company, as the borrower (in such capacity, the "Borrower"), Bank of America, N.A., as administrative agent, and the other
lenders and financial institutions party thereto, providing for $1,400,000,000 in aggregate principal amount of senior unsecured
revolving credit facilities (the "new revolving credit facility"). The new revolving credit facility matures on July 15, 2029.
Interest and Fees
Borrowings under the new revolving credit facility will bear interest at a floating rate, which for U.S. Dollar-denominated loans
can be, at the Borrower's option, either (a) Term SOFR (as defined in the Credit Agreement), plusan applicable margin
ranging from 0.875% to 1.375% per annum, or (b) Base Rate (as defined in the Credit Agreement), plusan applicable margin
ranging from 0.000% to 0.375% per annum, in each case, such applicable margins to be determined based on the Borrower's
debt rating.
In addition to paying interest on the outstanding principal under the new revolving credit facility, the Borrower will be required
to pay (i) an unused line fee per annum of the average daily unused portion of the new revolving credit facility, (ii) a letter of
credit fronting fee based on a percentage of the aggregate face amount of outstanding letters of credit, and (iii) certain other
customary fees and expenses of the lenders and agents.
Prepayments
The Borrower may voluntarily repay outstanding loans under the new revolving credit facility at any time, without premium or
penalty.
Restrictive Covenants and Other Matters
The Credit Agreement contains customary covenants, including, but not limited to, (a) restrictions on the Borrower's and its
subsidiaries' ability to merge and consolidate with other companies, dispose of all or substantially all assets, incur indebtedness,
or grant liens or other security interests on assets, in each case, subject to certain customary exceptions and (b) the requirement
that the obligations of the Borrower under the new revolving credit facility be guaranteed by any existing or future direct or
indirect domestic subsidiary of the Borrower that guarantees other indebtedness of the Borrower in an aggregate principal or
committed amount in excess of $50,000,000, subject to certain customary exceptions. As of the closing date, no subsidiaries of
the Borrower were required to guarantee the new revolving credit facility.
The Credit Agreement requires the maintenance of (a) an interest coverage ratio of not less than 2.75 to 1.00 as of the end of
each fiscal quarter and (b) a total leverage ratio as of the end of each fiscal quarter, not to exceed (x) 3.75 to 1.00 with respect to
fiscal quarters ending on March 31, June 30 and December 31 of each year, and (y) 4.00 to 1.00 with respect to fiscal quarters
ending on September 30 of each year. The total leverage ratio financial covenant is subject to a step-up to 4.25 to 1.00, with
respect to fiscal quarters in which certain material acquisitions are consummated, and for a period of four fiscal quarters
thereafter, and subject to certain customary exceptions.
The lenders party to the Credit Agreement and their respective affiliates have various banking arrangements with the Company
in the ordinary course of business, for which they receive customary fees and expenses.
The foregoing summary of the Credit Agreement is qualified in its entirety by reference to the actual text of the Credit
Agreement, a copy of which is filed herewith as Exhibit 10.1.