Fitch: Mattel unchanged

Fitch Ratings said Mattel, Inc.'s A- issuer default and senior debt ratings and its F2 short-term issuer default and commercial paper ratings are unchanged following the company's announcement that it agreed to purchase HIT Entertainment Ltd for $680 million in cash.

The transaction is expected to be funded mostly with debt. Fitch previously said there is room in Mattel's ratings to moderately increase leverage to near 1.4 times. Even if the acquisition is completely financed with debt, leverage is likely to remain near 1.4 times.

The agency said the acquisition is not expected to have more than a modest impact on Mattel's more than $6 billion in revenues but should help the bottom line as HIT's licensing-based business would carry higher EBITDA margins than Mattel's average.

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