Mattel 2015 Annual Report Download - page 76

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In January 2016, a major credit rating agency changed Mattel's long-term credit rating from A- to BBB+, maintained its
short-term credit rating of F2, and changed its outlook from negative to stable. In January 2015, a major credit rating agency
changed Mattel’s long-term credit rating from BBB+ to BBB and maintained its short-term credit rating of A-2 and outlook at
stable. Another major credit rating agency maintained Mattel’s long-term credit rating of Baa1 and short-term credit rating of
P-2 and changed its outlook from stable to negative. A third major credit rating agency maintained Mattel’s long-term credit
rating of A- and short-term credit rating of F2 and changed its outlook from stable to negative. A reduction in Mattel’s credit
ratings could increase the cost of obtaining financing.
Short-Term Borrowings
As of December 31, 2015, Mattel had foreign short-term bank loans outstanding of $16.9 million. As of December 31,
2014, Mattel had no foreign short-term bank loans outstanding. As of December 31, 2015 and 2014, Mattel had no borrowings
outstanding under the credit facility.
During 2015 and 2014, Mattel had average borrowings of $2.9 million and $17.5 million, respectively, under its foreign
short-term bank loans, and $374.3 million and $680.8 million, respectively, under the credit facility and other short-term
borrowings, to help finance its seasonal working capital requirements. The weighted average interest rate on foreign short-term
bank loans during 2015 and 2014 was 13.7% and 11.2%, respectively. The weighted average interest rate on the credit facility
and other short-term borrowings during 2015 and 2014 was 0.3% and 0.2%, respectively.
Long-Term Debt
In May 2014, Mattel issued $500.0 million aggregate principal amount of 2.35% senior unsecured notes due May 6, 2019
(“2014 Senior Notes”). Interest on the 2014 Senior Notes is payable semi-annually on May 6 and November 6 of each year,
beginning November 6, 2014. Mattel may redeem all or part of the 2014 Senior Notes at any time or from time to time at its
option, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued
and unpaid interest to, but excluding, the redemption date, and (ii) a “make-whole” amount based on the yield of a comparable
US Treasury security plus 12.5 basis points.
In March 2013, Mattel issued $250.0 million aggregate principal amount of 1.70% senior unsecured notes (“1.70%
Senior Notes”) due March 15, 2018 and $250.0 million aggregate principal amount of 3.15% senior unsecured notes (“3.15%
Senior Notes”) due March 15, 2023 (collectively, “2013 Senior Notes”). Interest on the 2013 Senior Notes is payable semi-
annually on March 15 and September 15 of each year, beginning September 15, 2013. Mattel may redeem all or part of the
1.70% Senior Notes at any time or from time to time at its option, at a redemption price equal to the greater of (i) 100% of the
principal amount of the notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date, and (ii) a
“make-whole” amount based on the yield of a comparable US Treasury security plus 15 basis points. Mattel may redeem all or
part of the 3.15% Senior Notes at any time or from time to time prior to December 15, 2022 (three months prior to the maturity
date of the 3.15% Senior Notes) at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of
the notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date, and (ii) a “make-whole”
amount based on the yield of a comparable US Treasury security plus 20 basis points. Mattel may redeem all or part of the
3.15% Senior Notes at any time or from time to time on or after December 15, 2022 (three months prior to the maturity date for
the 3.15% Senior Notes) at its option, at a redemption price equal to 100% of the principal amount of the notes to be redeemed
plus accrued and unpaid interest to, but excluding, the redemption date.
Mattel’s 2010 Senior Notes bear interest at fixed rates ranging from 4.35% to 6.20%, with a weighted average interest
rate of 5.28% as of December 31, 2015 and 2014. Mattel’s 2011 Senior Notes bear interest at fixed rates ranging from 2.50% to
5.45%, with a weighted average interest rate of 3.98% as of December 31, 2015 and 2014. Mattel’s 2013 Senior Notes bear
interest at fixed rates ranging from 1.70% to 3.15%, with a weighted average interest rate of 2.43% as of December 31, 2015
and 2014. Mattel’s 2014 Senior Notes bear interest at a fixed rate of 2.35% as of December 31, 2015.
During 2014, Mattel repaid $44.6 million of long-term borrowings assumed through the acquisition of MEGA Brands.