McDonald's Borrows $1 Billion to Fortify Cash Position as Virus Crimps Business
March 26 2020 - 2:05PM
Dow Jones News
By Micah Maidenberg
McDonald's Corp. borrowed $1 billion to bolster its cash
balances, describing the new loan as a precautionary measure that
will provide it with financial flexibility as the coronavirus
decimates its business.
The fast food chain also said Thursday it has an additional $3.5
billion in loans it can draw upon but hasn't done so yet.
Chicago-based McDonald's said Wednesday that it is working to
support liquidity among the franchisees that run its restaurants,
including deferring rent payments. In the U.S. and other markets,
McDonald's has closed dining rooms and is only offering customers
drive-thru, delivery and take-out meals, in line with government
restrictions.
Investors expect sales at the company--as well as other
restaurant chains--to take a major hit in the second quarter.
Analysts at Robert W. Baird & Co. on Wednesday said they
believe that global comparable-store sales at McDonald's will fall
30% in the quarter.
Companies have moved to fortify their cash positions to prepare
for weaker economic growth and business activity tied to the
pandemic. Some have stopped paying dividends and cut such payouts.
Other companies are drawing down credit lines and suspending share
buybacks.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
March 26, 2020 13:50 ET (17:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
McDonalds (NYSE:MCD)
Historical Stock Chart
From Aug 2024 to Sep 2024
McDonalds (NYSE:MCD)
Historical Stock Chart
From Sep 2023 to Sep 2024