Standard and Poor's is considering lowering its long-term debt ratings on
after it set plans to close 175 restaurants and cut additional jobs.
S&P said its review covers McDonald's single A-plus long-term corporate credit, senior unsecured debt, senior unsecured bank loan ratings and its class A subordinated rating. The company had $9.6 billion of debt as of June 30, S&P said. On top of a previously announced restructuring, the fast-food giant said on Friday that it would exit operations in three countries and close 175 underperforming restaurants. It also set plans to cut up to 600 jobs.
"Although these steps may ultimately bring about some improvement, we remain concerned that earnings are still being challenged by lackluster growth in the U.S. and problems internationally," Standard & Poor's credit analyst Gerald Hirschberg wrote in a research note. "The company's domestic competitors have made inroads in terms of actual or perceived quality, service, and cleanliness, and there has been a decided slowdown in the company's growth rate," he added.
component's shares were down 39 cents, or 2.2%, at $17.40 in recent trading on the
New York Stock Exchange.