Bulletin: McDonald's Corp.'s Latest Shareholder-Friendly Initiatives Are Credit Neutral

NEW YORK (S&P Global Ratings) Sept. 21, 2018--S&P Global Ratings said it believes McDonald's Corp. can comfortably absorb the 15% increase in its quarterly dividend announced today into its current capital allocation plans and rating. The increase moves its shareholder target to $25 billion for the three-year period ending 2019. This is a modest increasefrom our forecast for about $24 billion. This shareholder-friendly initiative is broadly in line with our expectations and therefore the rating is unaffected (BBB+/Stable/--). We expect leverage to remain in the mid-3x area for the next 12 months pro forma for this dividend increase, interest coverage to remain in the mid-7x area, and funds from operations to debt to stay in the 20% range. This is

...NEW YORK (S&P Global Ratings) Sept. 21, 2018--S&P Global Ratings said it believes McDonald's Corp. can comfortably absorb the 15% increase in its quarterly dividend announced today into its current capital allocation plans and rating. The increase moves its shareholder target to $25 billion for the three-year period ending 2019. This is a modest increasefrom our forecast for about $24 billion. This shareholder-friendly initiative is broadly in line with our expectations and therefore the rating is unaffected (###+/Stable/--). We expect leverage to remain in the mid-3x area for the next 12 months pro forma for this dividend increase, interest coverage to remain in the mid-7x area, and funds from operations to debt to stay in the 20% range. This is despite some operating income pressure from recent foreign currency headwinds and added costs from U.S. business restructuring. We also expect somewhat elevated capital spending associated with items including store improvements in the coming year...

Bulletin