Section 1 – Registrant’s Business and Operations
| Item 1.01 | Entry into a Material Definitive Agreement |
3.375% Senior Notes due 2026 and 3.750% Senior Notes due 2029
On March 19, 2021, Mattel, Inc. (the “Company” or the “Issuer”) issued (i) $600,000,000 aggregate principal amount of 3.375% Senior Notes due 2026 (the “2026 Notes”) and (ii) $600,000,000 aggregate principal amount of 3.750% Senior Notes due 2029 (the “2029 Notes” and, together with the 2026 Notes, the “Notes” and each a “series” of the Notes). The 2026 Notes were issued pursuant to an indenture dated March 19, 2021 (the “2026 Notes Indenture”), among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (the “Trustee”). The 2029 Notes were issued pursuant to an indenture dated March 19, 2021 (the “2029 Notes Indenture” and, together with the 2026 Notes Indenture, the “Indentures” and each, an “Indenture”), among the Company, the guarantors named therein and the Trustee. The Notes of each series pay interest semi-annually in arrears. The Notes were offered in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside of the United States in reliance on Regulation S under the Securities Act.
Optional Redemption Provisions and Change of Control Triggering Event
At any time prior to April 1, 2023, in the case of the 2026 Notes, or April 1, 2024, in the case of the 2029 Notes, upon not less than 10 nor more than 60 days’ notice, the Notes of each series will be redeemable at the Issuer’s option, in whole at any time or in part from time to time, at a price equal to 100% of the principal amount of the Notes redeemed, plus a make-whole premium as set forth in the applicable Indenture, plus accrued and unpaid interest, if any, to (but not including) the applicable redemption date. Beginning April 1, 2023, in the case of the 2026 Notes, or April 1, 2024, in the case of the 2029 Notes, the Issuer may redeem the Notes of such series, at its option, in whole at any time or in part from time to time, subject to the payment of a redemption price together with accrued and unpaid interest, if any, to (but not including) the applicable redemption date. The redemption price includes a call premium that varies (from 0% to 1.688%, in the case of the 2026 Notes, or from 0% to 1.875%, in the case of the 2029 Notes) depending on the year of redemption.
In addition, at any time prior to April 1, 2023, in the case of the 2026 Notes, or April 1, 2024, in the case of the 2029 Notes, the Issuer may redeem up to 40% of the aggregate principal amount of the Notes of such series at a redemption price equal to 103.375%, in the case of the 2026 Notes, or 103.750%, in the case of the 2029 Notes, of the principal amount thereof, together with accrued and unpaid interest, if any, to (but not including) the applicable redemption date, with the net cash proceeds of sales of one or more equity offerings by the Issuer or any direct or indirect parent of the Issuer.
The holders of the Notes have the right to require the Issuer to repurchase the Notes of any series at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the date of repurchase upon the occurrence of a Change of Control Triggering Event (as defined in the Indentures). If at any time holders of not less than 90% of the principal amount of the outstanding Notes of a series accept a change of control offer, the Issuer or a third party will have the right to redeem all of the Notes of such series then outstanding at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the date of repurchase.
Ranking
The Notes of each series are the Issuer’s and the guarantors’ senior unsecured obligations. The Notes of each series are guaranteed by the Issuer’s existing and, subject to certain exceptions, future wholly owned domestic restricted subsidiaries that guarantee the Issuer’s senior secured revolving credit facilities (as defined below) or certain other indebtedness. Under the terms of the applicable Indenture, the Notes of each series rank equally in right of payment with all of the Issuer’s and the guarantors’ existing and future senior debt, including the Issuer’s Existing Notes (as defined in the Indentures) and borrowings under the senior secured revolving credit facilities, and rank senior in right of payment to the Issuer’s and guarantors’ existing and future debt and other obligations that expressly provide for their subordination to the Notes. The Notes of each series are structurally subordinated to all of the existing and future liabilities, including trade payables, of the Issuer’s subsidiaries that do not guarantee the Notes of each series (including the Canadian Revolving Subfacility, the French Revolving Subfacility, the Spanish Revolving Subfacility, the European (GNU) Revolving Subfacility and the Australian Revolving Subfacility (each as defined in the Credit Agreement (as defined below) related to the senior secured revolving credit facilities) and are effectively subordinated to the Issuer’s and the guarantors’ existing and future senior secured debt to the extent of the value of the collateral securing such debt (including borrowings under the senior secured revolving credit facilities). The guarantees are, with respect to the assets of the guarantors of the Notes of each series, structurally senior to all of the Issuer’s existing indebtedness, future indebtedness or other liabilities that are not guaranteed by such guarantors, including the Issuer’s obligations under the Existing Non-Guaranteed Notes (as defined in the Indentures).
