MCDONALDS CORPMCD

MCDONALDS CORP Debt Disclosure

10-KFiled Feb 24, 20263 min read
Debt Financing
LINE OF CREDIT AGREEMENTS
At December 31, 2025, the Company had a line of credit agreement of $4.0 billion, which expires in June 2028. The Company incurs fees of 0.08% per annum on the total commitment, which remained unused. Fees and interest rates on this line are primarily based on the Company's long-term credit rating assigned by Moody’s and Standard & Poor's. In addition, the Company's subsidiaries had unused lines of credit that were primarily uncommitted, short-term and denominated in various currencies at local market rates of interest.
The weighted-average interest rate of short-term borrowings was 4.2% at December 31, 2025 (based on $4 million of foreign currency bank line borrowings and $798 million of commercial paper outstanding) and 4.6% at December 31, 2024 (based on $5 million of foreign currency bank line borrowings and $790 million of commercial paper outstanding). At December 31, 2025, $798 million of short-term borrowings and $725 million of current maturities of other debt obligations, were classified as Long-term debt on the Consolidated Balance Sheet as they are supported by a long-term line of credit agreement expiring in June 2028.
DEBT OBLIGATIONS
The Company has incurred debt obligations principally through public and private offerings and bank loans. There are no provisions in the Company’s debt obligations that would accelerate repayment of debt as a result of a change in credit ratings or a material adverse change in the Company’s business. Certain of the Company’s debt obligations contain cross-acceleration provisions, and restrictions on Company and subsidiary mortgages and the long-term debt of certain subsidiaries. Under certain agreements, the Company has the option to retire debt prior to maturity, either at par or at a premium over par. The Company has no current plans to retire a significant amount of its debt prior to maturity, but continues to look for ways to optimize its debt portfolio.
The following table summarizes the Company’s debt obligations (interest rates and debt amounts reflected in the table include the effects of interest rate swaps used to hedge debt).
Interest rates(1)
December 31
Amounts outstanding
December 31
In millions of U.S. DollarsMaturity dates2025202420252024
Fixed4.4 %4.2 %$23,233 $24,134 
Floating5.1 5.7 1,298 1,290 
Total U.S. Dollar2027-205324,531 25,424 
Fixed2.6 2.5 11,486 8,875 
Floating— 5.3 — 311 
Total Euro2026-203511,486 9,186 
Fixed3.7 3.7 400 371 
Floating— — — 
Total Australian Dollar2026-2029400 371 
Total British Pounds Sterling - Fixed2032-20544.1 4.1 1,679 1,559 
Total Canadian Dollar - Fixed2031-20324.5 4.0 1,275 1,390 
Total Japanese Yen - Fixed20302.9 2.9 80 79 
Fixed1.2 1.2 694 605 
Floating— 0.7 2 
Total other currencies(2)
2028-2032694 607 
Debt obligations before fair value adjustments and deferred debt costs(3)
40,145 38,616 
Fair value adjustments(4)
(15)(40)
Deferred debt costs(157)(152)
Total debt obligations$39,973 $38,424 
(1)Weighted-average effective rate, computed on a semi-annual basis.
(2)Consists of Swiss Francs.
(3)Aggregate maturities for 2025 debt balances, before fair value adjustments and deferred debt costs, are as follows (in millions): 2026–$0; 2027–$3,201; 2028–$5,166; 2029–$3,637; 2030–$3,011; Thereafter-$25,130. These amounts include a reclassification of short-term obligations totaling $1.5 billion to long-term obligations as they are supported by a long-term line of credit agreement expiring in June 2028.
(4)The carrying value of underlying items in fair value hedges, in this case debt obligations, are adjusted for fair value changes to the extent they are attributable to the risk designated as being hedged. The related hedging instruments are also recorded at fair value on the Consolidated Balance Sheet.

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 25, 2025
2023Feb 22, 2024
2022Feb 24, 2023
2021Feb 24, 2022
2020Feb 23, 2021
2019Feb 26, 2020
2018Feb 22, 2019
2017Feb 23, 2018
2016Mar 1, 2017
2015Feb 25, 2016

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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