As a worldwide symbol of globalization, it seems a fitting choice by China’s policy makers to select McDonald’s for its first bond sale.
McDonald’s announced on Thursday that it would be the first foreign, non-financial company to sell yuan-denominated bonds.
The Oak Brook, Illinois-based company will raise 200 million yuan ($29 million) with three-year bonds offering 3% interest.
Although the deal is far from a ‘Super Size’ transaction, it does mark another step in China’s efforts to relax its currency controls and perhaps eventually allow the yuan, or renminbi as it’s often called, to become freely convertible.
News of the bond deal comes on the same day that China began to allow the Malaysian ringgit to trade directly against the yuan. China’s central bank began setting a rate for the yuan and ringgit on Thursday in the same way it does for just a few other currencies, such as the U.S. dollar, U.K. pound, euro, yen and Hong Kong dollar.
McDonald’s said the funds will be used to support the company’s continued expansion. This year, the fast-food chain plans to add another 150 more restaurants in China.
Since opening its first restaurant in Shenzhen in 1990, McDonald’s has added more than 1,100 stores in mainland China.
“China is the fastest-growing market for McDonald’s worldwide in terms of new restaurant openings,” the company said in a statement.
A number of global brands are increasingly relying on China’s booming economy and rising incomes to boost their earnings.
Levi Strauss launched a new global brand called dENiZEN in China on Wednesday.
The brand’s name is intended for young shoppers in emerging markets like China, Singapore and South Korea.
