Fitch Ratings has assigned an ''A'' rating to McDonald''s (NYSE:MCD) USD450 million 3.5% 10-year senior unsecured notes due July 15, 2020 and its USD300 million 4.875% 30-year senior unsecured notes due July 15, 2040.

McDonald''s current ratings are as follows:
--Long-term Issuer Default Rating (IDR) ''A'';
--Bank credit facility ''A'';
--Senior unsecured debt ''A'';
--Short-term IDR ''F1'';
--Commercial Paper ''F1''.

The Rating Outlook is Stable. At March 31, 2010, McDonald''s had USD10.5 billion of total debt.

The notes were issued under McDonald''s existing indenture dated Oct. 15, 1996, and rank pari passu with McDonald''s existing debt. The notes are not bound by financial covenants. Proceeds will be used for general corporate purposes. Fitch views the debt issuance as opportunistic, given McDonald''s considerable financial flexibility. Although debt will increase, leverage metrics are not expected to rise because of operating income and cash flow growth.

McDonald''s ratings reflect the company''s substantial cash flow generation, significant liquidity, and leading global market position, with 32,466 units at June 30, 2010. McDonald''s cash flow from operations grew at an 8% compound annual rate since 2004 to $5.8 billion in 2009, and FCF (defined as cash flow from operations less capital expenditures and dividends) averaged $1.6 billion during the same period. Ongoing sources of liquidity include a sizeable cash balance, which has exceeded $1 billion annually since 2004, and a USD1.3 billion undrawn committed line of credit expiring Feb. 18, 2012. At March 31, 2010, aggregate debt maturities were approximately USD425 million in 2010, USD600 million in 2011 and USD900 million in 2012.

McDonald''s continues to generate consistently strong performance. Fitch attributes the company''s success, which is characterized by 29 consecutive quarters of comparable same-store sales growth and 18 successive quarters of consolidated operating margin expansion, to its established franchisee network, its strong procurement and logistics infrastructure and its well-executed menu and new product strategy. McDonald''s sales continue to benefit from its everyday value items, the recent launch of frappes and smoothies in the U.S., a focus on locally relevant offerings such as smaller portion premium sandwiches in Europe, and promotions around existing core products in the Asia/Pacific, Middle East, and Africa regions (APMEA). Despite industry headwinds, including high global unemployment and shaky consumer confidence, Fitch expects McDonald''s sales to continue to lead the industry because of its respected brand, the convenience offered by its vast geographic presence and the company''s ability to offer consistently high quality food at a good value.

During the second quarter ended June 30, 2010, revenue increased 5% to $5.9 billion. Global comparable sales grew 4.8%, and traffic increased 3.9% with every region of the world contributing. Same-store sales (SSS) rose 3.7% in the U.S., driven by beverages; 5.2% in Europe with the U.K., France and Russia performing strongest; and 4.6% in APMEA driven by Australia and China. Consolidated operating income increased 10% to $1.8 billion and combined operating margin expanded 120 basis points to 31%. SSS growth and lower commodity food costs were the primary reasons for the improvement in profitability. Foreign currency translation had a minimal effect on consolidated operating results as the weaker EURO was offset by a stronger Australian Dollar and Canadian Dollar.

For the LTM period ended March 31, 2010, which includes results from the latest SEC 10Q filing, total debt-to-operating earnings before interest, taxes, depreciation and amortization (EBITDA) and operating EBITDA-to-gross interest expense were 1.3 times (x) and 17.0x, respectively. Rent-adjusted leverage, defined as total debt plus eight times gross rent expense divided by earnings before interest, taxes, depreciation, amortization and gross rent expense (EBITDAR), was 2.4x. Rent adjusted interest coverage, defined as EBITDAR divided by gross interest expense plus gross rent expense, was 4.9x, and funds from operations (FFO) fixed-charge coverage were 4.0x. FFO fixed-charge coverage is defined as funds from operations plus gross interest expense plus preferred dividends plus rent expense divided by gross interest expense plus preferred dividends plus rent expense.

McDonald''s credit statistics have been in line with Fitch''s expectations. The company''s currently plan is to use its cash flow to invest in its business, for efforts such as reimaging restaurants and opening new units, and to return any excess to shareholders. Nonetheless, improvement in rent-adjusted leverage due to strong SSS performance, continued margin expansion and relatively balanced financial policies would result in future upgrades. Conversely, an increase in rent-adjusted leverage due to deteriorating operating fundamentals and large debt-financed share repurchases would be negative for the ratings.

The following applicable criteria report is available on Fitch''s web site at ''www.fitchratings.com'':
--Corporate Rating Methodology (Nov. 24, 2009).

Additional information is available at ''www.fitchratings.com''.

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