Filed Pursuant to Rule 424(b)(2)
Registration No. 333-92212
PRICING SUPPLEMENT NO. 2, DATED MAY 19, 2003
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(To Prospectus, dated July 22, 2002 and
Prospectus Supplement, dated August 6, 2002)
U.S.$1,975,000,000
McDONALD'S CORPORATION
Medium-Term Notes, Series H
(Fixed Rate Notes)
Due from 1 Year to 60 Years from Date of Issue
The following description of the terms of the Notes offered hereby supplements,
and to the extent inconsistent therewith replaces, the descriptions included in
the Prospectus and Prospectus Supplement referred to above, to which
descriptions reference is hereby made.
Principal Amount: U.S.$150,000,000
Issue Price: 99.108% of the Principal Amount of the Notes
Original Issue Date: May 22, 2003
Stated Maturity: June 1, 2013
Interest Rate: 4.125% per annum
Interest Payment Dates: December 1 and June 1 of each year
commencing December 1, 2003
(Applicable only if other than February 15 and August 15 of each year)
Regular Record Dates: November 15 and May 15 of each year
(Applicable only if other than February 1 and August 1 of each year)
Form: [X] Book-Entry [_] Certificated
Specified Currency:
(If other than U.S. dollars)
Option to Receive Payments in Specified Currency: [_] Yes [_] No
(Applicable only if Specified Currency is other than U.S. dollars and if
Note is not in Book Entry form)
Authorized Denominations:
(Applicable only if other than U.S.$1,000 and increments of U.S.$1,000 or
if Specified Currency is other than U.S. dollars)
Method of Payment of Principal:
(Applicable only if other than immediately available funds)
Optional Redemption: [_] The Notes cannot be redeemed prior to
Stated Maturity.
[X] The Notes can be redeemed in whole or in
part at any time prior to Stated
Maturity at the option of McDonald's
Corporation (the "Company") as set forth
below.
Optional Redemption Dates:
Redemption Prices:
[_] The Redemption Price shall initially be % of the principal amount
of the Note to be redeemed and shall decline at each anniversary of the initial
Optional Redemption Date by % of the principal amount to be redeemed until
the Redemption Price is 100% of such principal amount; provided, however, that
in the case of an Original Issue Discount Note, the Redemption Price shall be
the Amortized Face Amount of the principal amount to be redeemed.
[X] Other: The Notes will be redeemable in whole or in part, at the
Company's option at any time, upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to the greater of:
(1) 100% of the principal amount of the Notes; or
(2) the sum of the present values of the remaining scheduled payments of
principal and interest on the Notes being redeemed from the redemption date to
the maturity date, discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 15 basis points.
We will also pay the accrued and unpaid interest on the Notes to the redemption
date.
"Treasury Rate" means, with respect to any redemption date, the rate per annum
equal to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue for the Notes to be redeemed, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for the redemption date.
"Comparable Treasury Issue" means the United States Treasury security selected
by an Independent Investment Banker as having a maturity comparable to the
remaining term of the Notes to be redeemed that would be used, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Notes to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date, (i) the
arithmetic average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day before the redemption date, as published in the daily statistical
release (or any successor release) by the Federal Reserve Bank of New York and
designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or
(ii) if that release (or any successor release) is not available or does not
contain those prices on that business day, the arithmetic average of the
Reference Treasury Dealer Quotations for the redemption date.
"Independent Investment Banker" means one of the Reference Treasury Dealers
selected by the Company.
"Reference Dealer" means Citigroup Global Markets Inc. plus four others selected
by the Company or their affiliates which are primary U.S. Government securities
dealers, and their respective sucessors; provided, however, that if any of the
foregoing or their affiliates shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer") the Company
shall substitute for it another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means with respect to each Reference
Dealer and any redemption date, the average, as determined by the Independent
Investment Banker, of the bid and ask prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted by the
reference dealer at 5:00 p.m. (New York time) on the third business day
preceding the redemption date.
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of the Notes to be redeemed.
Unless the Company defaults in payment of the redemption price, after the
redemption date interest will cease to accrue on the Notes or portion of the
Notes called for redemption.
Sinking Fund: [X] The Notes are not subject to a Sinking Fund.
[_] The Notes are subject to a Sinking Fund.
Sinking Fund Dates:
Sinking Fund Amounts:
Amortizing Note: [_] Yes [X] No
Amortization Schedule:
Optional Repayment: [_] Yes [X] No
Optional Repayment Dates:
Optional Repayment Prices:
Original Issue Discount Note [_] Yes [X] No
Total Amount of OID:
Yield to Stated Maturity:
Initial Accrual Period OID:
Calculation Agent (if other than Principal Paying Agent):
Agents' discount or commission: .625% of the principal amount of the Notes
Net proceeds to Company (if sale to Agents, as principals): 98.483% of the
Principal Amount of the Notes
Agents' Capacity: [_] Agent [X] Principal
Agents: Citigroup
Barclays Capital
Scotia Capital
SG Cowen
Westdeutsche Landesbank Girozentrale, London Branch
ABN AMRO Incorporated
BNP Paribas
Banc of America Securities LLC
Banc One Capital Markets, Inc.
Fleet Securities, Inc.
ING Barings Capital
J.P. Morgan
Merrill Lynch & Co.
Morgan Stanley
Sun Trust Robinson Humphrey
US Bank
CUSIP: 58013MDU5
The Agents have agreed to reimburse the issuer for certain expenses incurred in
connection with the offering.
Plan of Distribution:
Agents Principal Amount
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Citigroup Global Markets Inc. $ 82,425,000
Barclays Capital Inc. 7,200,000
Scotia Capital (USA) Inc. 7,200,000
SG Cowen Securities Corporation 7,200,000
Westdeutsche Landesbank Girozentrale, London Branch 7,200,000
ABN AMRO Incorporated 3,525,000
BNP Paribas Securities Corp. 3,525,000
Banc of America Securities LLC 3,525,000
Banc One Capital Markets, Inc. 3,525,000
Fleet Securities, Inc. 3,525,000
ING Barings Capital 3,525,000
J.P. Morgan Securities Inc. 3,525,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 3,525,000
Morgan Stanley & Co. Incorporated 3,525,000
Sun Trust Capital Markets, Inc. 3,525,000
US Bank 3,525,000
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Total: $150,000,000
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