MATTEL, INC. 
Item 1.01 Entry into a Material Definitive Agreement.
New Senior Secured Revolving Credit Facility
On
Interest and Fees
Borrowings under the new senior secured revolving credit facility will bear interest at a floating rate, which can be either, at the Borrower's option, (a) adjusted Term SOFR plus an applicable margin ranging from 1.125% to 2.000% per annum or (b) an alternate base rate plus an applicable margin ranging from 0.125% to 1.000% 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 senior secured 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 senior secured 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 senior secured revolving credit facility at any time, without premium or penalty.
Guarantors and Collateral
The obligations of the Borrower under the new senior secured revolving credit
facility are guaranteed by each domestic subsidiary of the Borrower that
guarantees any of the Borrower's senior unsecured notes (collectively, the
"Guarantors"). If the Borrower achieves a debt rating of BBB-, Baa3, and/or BBB-
(or higher) from any two of S&P, Moody's, and Fitch, respectively, and no event
of default has occurred or is continuing at such time and the Borrower provides
a certification regarding the foregoing to the administrative agent (a
"Fall-Away Event"), the obligations of the Borrower under the new senior secured
revolving credit facility will instead be required to be guaranteed by each
existing and future direct and indirect domestic subsidiary of the Borrower only
to the extent such subsidiary guarantees other indebtedness of the Borrower in
an aggregate principal or committed amount in excess of
The new senior secured revolving credit facility is secured by liens on substantially all of the Borrower's and the Guarantors' present and after-acquired assets (subject to certain exceptions), including domestic accounts receivable, inventory, certain trademarks and patents, and certain equity interests in direct material subsidiaries of the Borrower and the Guarantors. If a Fall-Away Event occurs, all collateral securing the new senior secured revolving credit facility shall be permanently released.
Restrictive Covenants and Other Matters
The Credit Agreement contains customary covenants, including, but not limited to, restrictions on the Borrower's and its subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances, or investments, pay dividends, sell or otherwise dispose of assets, amend organizational documents, change accounting policies or reporting practices, or enter into negative pledges with respect to assets that constitute collateral. The restrictive covenants also contain customary
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exceptions, including the uncapped ability to make investments and pay dividends if, in each case, the pro forma total leverage ratio after giving effect to such investment or dividend will be at least 0.25 to 1.00 inside the then-applicable total leverage ratio financial covenant level. Further, if a Fall-Away Event occurs, the restrictive covenants governing investments, dividends, negative pledges, and changes in accounting policies or reporting practices will no longer apply.
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 4.50 to
1.00 as of the end of the fiscal quarter ending
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.
Item 1.02 Termination of a Material Definitive Agreement.
On
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement.
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits: Exhibit No. Exhibit Description 10.1 Revolving Credit Agreement, dated as ofSeptember 15, 2022 , among the Company, as the borrower,Bank of America, N.A ., as Administrative Agent,BofA Securities, Inc. ,Citibank, N.A ., andWells Fargo Securities, LLC , as Joint Lead Arrangers and Bookrunners,Citibank, N.A . andWells Fargo Securities, LLC , as Co-Syndication Agents, and the other financial institutions party thereto 104 Cover Page Interactive Data File (embedded within the Inline XBRL Document)
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