McDowngrade: S&P Cuts ‘Releveraging’ Junk Food Vendor’s Debt To Almost Junk

Jon Alternative Media, Blogosphere, Market Commentary

Having told the world that it will borrow billions (and cut capex) to “return all free cash to investors,” it appears ratings agency S&P just needed to remind McDonalds that Shareholder-friendly releveraging no longer comes for free…
*S&P LWRS MCDONALD’S RTG TO ‘BBB ’ ON SHR BUYBACK PLANS Who could have seen that coming?
Here’s why… (via S&P)
McDonald’s announced its intent to return an additional $10 billion to shareholders by the end of 2016, substantially funded by debt. We are lowering the corporate credit rating to ‘BBB ’ from ‘A-‘ since the company’s various credit metrics will now be measurably worse than our previous expectations.
Our assumption is that debt to EBITDA will rise to the low- to mid-3x range during 2016-2017 versus around mid-2x previously.

This post was published at Zero Hedge on 11/10/2015.