Moody's Places McDonald's Ratings On Review For Possible Downgrade

Moody's Investors Service on Tuesday placed McDonald's Corp. A2 credit rating on review for a possible downgrade, a day after the company said it plans to accelerate a 3-year shareholder return target and give $8 billion to $9 billion back to shareholders. "Overall, Moody's views this accelerated share repurchase and guidance to the high end of the payout range during a period of continuing operating weakness as McDonald's adopting a more aggressive financial policy towards shareholders that will result in significantly higher debt levels, weaker credit metrics and limit its financial flexibility." Moody's Senior Credit Officer Bill Fahy said in a statement. The fast-food giant may struggle to improve credit metrics, if its turnaround plan unveiled Monday fails to deliver, the rating agency said.Standard & Poor's on Monday downgraded McDonald's rating to A-minus from A. Shares were down 0.3% in early trade, but are up 2.5% in the year so far, while the Dow Jones Industrial Average has gained 1.2%.