Moody's rates Mattel issue Baa2

Moody's Investors Service said it assigned a Baa2 rating to Mattel Inc.'s new $350 million five year debt issue and affirmed Mattel's Baa2 long-term and Prime-2 short-term debt ratings.

The proceeds of the new issuance will be used for general corporate purposes including refinancing of upcoming debt maturities, the agency said.

The outlook remains stable.

According to Moody's, Mattel's Baa2 rating is based on the company's strong market positions, portfolio of strong brands, broad geographical diversification, conservative balance sheet and strong credit metrics, offset by 1) the toy industry's extreme seasonality and inherent volatility due to fashion risk that not only reflects the sudden shifts in the popularity of certain toy products but also includes fluid demographics such as age compression that exist for certain toy categories, as well as 2) the company's limited segment diversification, i.e. toys and games, modest overall organic growth prospects, highly concentrated customer base and exposure to cost increases and recalls.

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