McDonald’s Sells $900 Million of Debt to Match Record-Low Coupon

McDonald’s Corp. (MCD), the world’s largest restaurant chain, sold $900 million of bonds including a seven- year portion with a coupon that matched a record low, according to data compiled by Bloomberg.

The company sold $500 million of 0.75 percent three-year notes to yield 45 basis points more than similar-maturity Treasuries and $400 million of 1.875 percent seven-year debt with a spread of 88 basis points to equal the record coupon set by International Business Machines Corp. on May 8, the data show. A basis point is 0.01 percentage point.

The Big Mac seller, which claimed the lowest yield on 30- year debt almost four months ago, is borrowing money as it plans to hire 70,000 people in China this year, almost doubling its workforce there, and accelerates new store openings in the Asian nation to compete with Yum! Brands Inc.’s KFC and Pizza Hut.

McDonald’s paid a 3.7 percent coupon on its $500 million of 30-year bonds sold Feb. 2, a record low for the maturity, according to data compiled by Bloomberg. The securities traded at 97.4 cents on the dollar to yield 3.85 percent May 18, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Proceeds from today’s offering may be used for general corporate purposes, according to a person familiar with the offering who asked not to be identified citing lack of authorization to speak publicly about the deal. The debt may be rated A2 by Moody’s Investors Service and an equivalent A by Standard & Poor’s, the person said.

Bank of America Corp., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. managed the sale for the Oak Brook, Illinois-based company, the person said.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net