Mattel 2007 Annual Report Download - page 52

Bank of America, N.A., as administrative agent, Citicorp USA, Inc. and Barclays Bank PLC, as co-syndication
agents, and Societe Generale and BNP Paribas, as co-documentation agents. Pursuant to the domestic receivables
facility, Mattel Sales Corp. and Fisher-Price, Inc. (which are wholly-owned subsidiaries of Mattel) can sell
eligible trade receivables from Wal-Mart and Target to Mattel Factoring, Inc. (“Mattel Factoring”), a Delaware
corporation and wholly-owned, consolidated subsidiary of Mattel. Mattel Factoring is a special purpose entity
whose activities are limited to purchasing and selling receivables under this facility. Pursuant to the terms of the
domestic receivables facility and simultaneous with each receivables purchase, Mattel Factoring sells those
receivables to the bank group. Mattel records the transaction, reflecting cash proceeds and sale of accounts
receivable in its consolidated balance sheet, at the time of the sale of the receivables to the bank group.
Sales of receivables pursuant to the domestic receivables sales facility occur periodically, generally
quarterly. The receivables are sold by Mattel Sales Corp. and Fisher-Price, Inc. to Mattel Factoring for a
purchase price equal to the nominal amount of the receivables sold. Mattel Factoring then sells such receivables
to the bank group at a slight discount, and Mattel acts as a servicer for such receivables. Mattel has designated
Mattel Sales Corp. and Fisher-Price, Inc. as sub-servicers, as permitted by the facility. Mattel’s appointment as a
servicer is subject to termination events that are customary for such transactions. The domestic receivables sales
facility is also subject to conditions to funding, representations and warranties, undertakings and early
termination events that are customary for transactions of this nature. Mattel retains a servicing interest in the
receivables sold under this facility.
Until the Master Agreement was terminated on February 9, 2007, Mattel International Holdings B.V., a
company incorporated in the Netherlands (the “Depositor”), Mattel France, a company incorporated in France
(“Mattel France”), and Mattel GmbH, a company incorporated in Germany (“Mattel Germany”), each of which is
a subsidiary of Mattel, and Societe Generale Bank Nederland N.V. (“SGBN”), were parties to a Master
Agreement for the Transfer of Receivables that established a Euro 150 million European trade receivables
facility (the “European trade receivables facility”), pursuant to which Mattel France and Mattel Germany sold
trade receivables to SGBN. The European trade receivables facility was subject to conditions to funding,
representations and warranties, undertakings and early termination events that were customary for transactions of
this nature.
Sales of receivables pursuant to the European trade receivables facility occurred monthly, with the last such
sale occurring on January 10, 2007. The receivables were sold by Mattel France and Mattel Germany directly to
SGBN for a purchase price equal to the nominal amount of the receivables sold. As a result, no Mattel subsidiary
was used as a special purpose entity in connection with these transactions. A portion of the purchase price was
funded by SGBN and a portion by a deposit provided by the Depositor. The amount of the deposit was reset on
each date on which new receivables were sold. Through the termination date, the deposit in 2007 was, on
average, equal to approximately 54% of the aggregate notional amount of sold receivables outstanding during
such period.
As with the domestic receivables facility, each sale of accounts receivable was recorded in Mattel’s
consolidated balance sheet at the time of such sale. Under the European trade receivables facility, the outstanding
amount of receivables sold could not exceed Euro 60 million from February 1 through July 31 of each year and
could not exceed Euro 150 million at all other times.
Each of Mattel France and Mattel Germany was appointed to service the receivables sold by it to SGBN.
No servicing fees were paid by SGBN for such services. The appointment of each of Mattel France and Mattel
Germany to act as servicer was subject to termination events that were customary for transactions of this nature.
Mattel France and Mattel Germany were obligated to pay certain fees to the Depositor in consideration of
the Depositor providing the deposit to SGBN. Through the termination date, fees paid in 2007 by Mattel France
and Mattel Germany to the Depositor were, on average, approximately 0.1% of the aggregate notional amount of
sold receivables outstanding during such period.
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