CHICAGO – McDonald’s proposed $750 million issuance of three- and seven-year senior unsecured notes received an ‘A’ rating from Fitch Ratings, the agency announced May 23.

The notes are being issued under McDonald's Medium Term Notes Program. The money will be used for general corporate purposes, which may include refinancing of debt. McDonald's had $12.8 billion of total debt and $2.3 billion of cash at March 31.

Fitch said the ratings reflect McDonald’s substantial cash-flow generation, considerable financial flexibility and leading global market position. McDonald's annual free cash flow and year-end cash balance have averaged $1.7 billion and $2.1 billion, respectively, over the past five years, the agency said. Shareholders continue to receive significant cash through share repurchases and dividends; however McDonald’s is expected to maintain credit measures appropriate for its 'A/F1' ratings.

Fitch added that McDonald's significant real estate ownership and franchisee network provide a sizeable high-margin royalty stream, in addition to contractual rental income on properties owned or leased by McDonald's. As of March 31, franchisees and affiliates operated approximately 81 percent of the company's 33,517 system-wide restaurants. The remaining 19 percent were company-operated, Fitch said.