Not lovin’ it: Standard & Poor’s downgrades McDonald’s over debt plans
Fast food giant McDonald's has been downgraded by ratings agency Standard & Poor's (S&P), after announcing plans to increase debt in order to return $10bn (£6.6bn) of cash to investors by the end of 2016.
S&P has lowered the firm's credit rating to BBB+ from A, “since the company's various credit metrics will now be measurably worse than our previous expectations”.
The agency said that the outlook for McDonald's is stable “reflecting our view that there will be continued progress in the US”.
S&P added: “The stable outlook reflects our expectation that after borrowing at least $8bn during 2016 to return capital to shareholders, McDonald's will moderate share repurchases while continuing to work to return revenue growth and customer traffic.”
McDonald's suspended trading of its shares earlier this evening as it unveiled a raft of planned changes.
The group wants to turn more of its restaurants into franchises, and lifted the target figure to 4,000 refranchises by 2018, up from the previous aim of 3,000, and also wants to focus on improving customer experience.
"For too long we've asked customers to adapt to us, now we're flipping the paradigm," said chief exec Steve Easterbrook.