Mattel restarts shelved bond deal

Published on: 19th November 2019

Mattel has returned to the junk bond market with a bigger offering after allegations by a whistleblower derailed a similar sale earlier this year. 

As reported by Bloomberg, Mattel sold $600m of bonds to refinance existing debt, after an anonymous complaint about its accounting and internal controls forced it to halt a smaller offering in August. Mattel said in late October it had completed an internal investigation, pledging to strengthen financial reporting controls and saying it would restate some earnings.

The company’s debt-market return is another sign of regained investor confidence since the whistleblower’s letter, which it disclosed publicly on 8th August. The allegation contributed to a slide in Mattel’s shares which closed at a 19-year low later that month and caused the firm to pull a $250m debt offering. A subsequent investigation found accounting errors in Mattel’s reports for the last two quarters of 2017, as well as material weakness in financial reporting controls.

The company has since restated its quarterly results. The investigation determined that the independence of Mattel’s outside auditor had not been compromised.

With its latest debt offering, Mattel sold $600m of notes due in 2027 to refinance existing bonds maturing in 2020 and 2021, according to a person familiar with the matter who asked not to be identified because they’re not authorised to speak about it. The bonds priced at 99.2 cents to yield 6%, the person said.

A representative for El Segundo, California-based Mattel did not respond to a request for comment made before the deal priced.


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