Tags: McDonalds | Pound Bonds | Europe | Fundraising

McDonald's Debuting Pound Bonds as Part of Europe Fundraising

Wednesday, 04 Jun 2014 08:19 AM

McDonald’s Corp. is selling bonds in pounds for the first time as the world’s largest restaurant chain seeks to boost returns to shareholders.

The company is marketing 300 million pounds ($503 million) of 40-year notes as well as 400 million euros ($545 million) of 15-year bonds, according to a person familiar with the sale. The cost of borrowing in euros instead of dollars approached the biggest discount in more than five years, with the spread widening to 1.42 percentage points, according to Bank of America Merrill Lynch index data.

McDonald’s plans to return as much as $20 billion to shareholders by 2016 through dividends and share buybacks, as much as 20 percent more than in the previous two years, the Illinois-based company said in a May 28 statement. Chief Financial Officer Pete Bensen said in March the company can “probably get more aggressive,” with its borrowing and still retain its credit rating.

McDonald’s bonds in pounds will be priced to yield 73 basis points more than U.K. government debt and the euro securities will yield 63 basis points more than the mid-swap rate, said the person, who asked not to be identified because they’re not authorized to speak about it. The restaurant chain paid 65 basis points on 12-year euro notes sold in December, according to data compiled by Bloomberg.

The company joins AT&T Inc. among U.S. companies crossing the Atlantic to raise money. The wireless carrier is selling 10- and 20-year bonds in euros as it seeks to finance its $48.5 billion acquisition of DirecTV.


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McDonald's Corp. is selling bonds in pounds for the first time as the world's largest restaurant chain seeks to boost returns to shareholders.
McDonalds, Pound Bonds, Europe, Fundraising
256
2014-19-04
Wednesday, 04 Jun 2014 08:19 AM
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