Research Update: McDonald's Corp. Outlook Revised To Negative On Coronavirus-Related Stress On Credit Quality; New Debt Rated 'BBB+'

McDonald's Corp. announced a $3.5 billion U.S. medium-term notes offering in tranches ranging from five to 30 years, with a goal of shoring up liquidity and pre-funding maturities against the backdrop of severe global disruption facing the restaurant industry due to the coronavirus pandemic. We are affirming the 'BBB+' issuer credit rating on McDonald's and revising the outlook to negative from stable to reflect the potential for an extended period of credit-measure weakness if COVID-related stress extends longer than we anticipate. We are also affirming the 'A-2' short-term rating on the company. At the same time, we assigned our 'BBB+' issue-level rating to the proposed issuance, which we consider prudent, proactive liquidity management that demonstrates McDonald's high standing in credit

...- McDonald's Corp. announced a $3.5 billion U.S. medium-term notes offering in tranches ranging from five to 30 years, with a goal of shoring up liquidity and pre-funding maturities against the backdrop of severe global disruption facing the restaurant industry due to the coronavirus pandemic. - We are affirming the '###+' issuer credit rating on McDonald's and revising the outlook to negative from stable to reflect the potential for an extended period of credit-measure weakness if COVID-related stress extends longer than we anticipate. We are also affirming the 'A-2' short-term rating on the company. - At the same time, we assigned our '###+' issue-level rating to the proposed issuance, which we consider prudent, proactive liquidity management that demonstrates McDonald's high standing in credit markets. - The negative outlook reflects the risk that extended stress on operating performance combined with shareholder returns could result in an expectation for prolonged credit measure deterioration...

Research Update