New York, Nov 12: Standard & Poor's said it may lower McDonald's Corp.'s long-term debt ratings because the world's largest fast-food chain's plan to close restaurants and cut jobs may not improve its business. S&P said it may cut its "A-plus" rating, its fifth-highest grade, on McDonald's long-term corporate credit, senior unsecured debt and senior bank loans. It said it may cut its "A" rating, one notch lower, on the company's subordinated debt. S&P affirmed McDonald's "A-1" short-term ratings.

The company had $9.6 billion of debt as of June 30, S&P said. A downgrade might boost borrowing costs.
"There has been a slow reversal of progress over the years," S&P analyst Gerald Hirschberg said in an interview. "The customer image of McDonald's as a product and a store isn't what it once was, in terms of its menu offerings and its service" and cleanliness, he said.

Hirschberg said any downgrade would likely not exceed one notch. S&P tries to complete rating reviews within three months. Bureau Report