McDonald's Borrowed in the Panic. The Bond Made 4%, the Stock Made 89%

$MCD 2050

McDonald's 4.200% notes due 2050

$MCD

McDonald's Corporation, common stock

$10,000 into McDonald's 30-year bond in March 2020, or $10,000 into $MCD stock the same day. Which did better?

McDonald's sold its 4.200% notes of 2050 into the COVID panic. Six years on the bondholder is up about 4% and the shareholder about 89%, and the reason is not the one most people reach for.

Figures marked 31 July 2026. Published Sep 27, 2026. Educational commentary, not investment advice.

In short

•McDonald's sold 30-year paper during the March 2020 panic at 98.855. $10,000 into it is worth about $10,430 today, a gain of roughly 4% over six years.

•The same $10,000 into $MCD stock that day is worth about $18,970, up about 89%, with $38.60 a share of dividends collected along the way.

•The bond did not lose because McDonald's got riskier. Its credit spread TIGHTENED from about 285 basis points to about 82. Every bit of the damage came from the Treasury long end, which went from 1.418% to 5.27%.

•That distinction is the whole point of this series. A bond can fall hard while the issuer's credit improves, and calling that a credit problem gets the cause exactly backwards.

Side by side

Metric	$MCD 2050	$MCD
Bought at	98.855 (issue, Mar 2020)	$162.98
Marked at	76.43	$270.64
Income collectedTwelve coupons, the first one long, plus accrued	$25.25 per $100 face	$38.60 per share
$10,000 is now worth	about $10,430	about $18,970
Total return	about +4%	about +89%
30-year Treasury yieldThis is what moved the bond, not McDonald's credit	1.418% at entry	5.27% at the mark
Credit spreadThe spread TIGHTENED by about 200bp. McDonald's credit got better, not worse	about 285bp at issue	about 82bp at the mark

Highlighted cells mark the side each line favours. $MCD 2050 leads 1, $MCD leads 2, and 4 favour neither. This is not a score, and the side leading more lines is not the better investment.

The trade

In the third week of March 2020, with credit markets seizing, McDonald's ($MCD) sold 4.200% notes due 2050 at 98.855. This page follows $10,000 into that bond against $10,000 into McDonald's stock at the same day's close of $162.98, income kept as cash on both sides with no reinvestment.

Both legs are marked 31 July 2026.

The result

	Bond	Stock
Price at entry	98.855	$162.98
Price at the mark	76.43	$270.64
Income collected	$25.25 per $100	$38.60 per share
$10,000 becomes	about $10,430	about $18,970
Total return	about +4%	about +89%

The equity won, and it won comfortably. Over six years the shareholder made roughly twenty times what the bondholder made.

The part that gets read backwards

The bond's price fell from 98.855 to 76.43. The obvious reading is that the market got more worried about McDonald's.

It did the opposite. McDonald's credit spread TIGHTENED, from roughly 285 basis points at issue to roughly 82 at the mark. In the market's own pricing, McDonald's is a materially better credit now than it was in the panic.

What destroyed the price was the risk-free rate underneath it. The 30-year Treasury went from 1.418% to 5.27%. A thirty-year bond with a fixed 4.200% coupon cannot survive that, no matter how good the borrower is.

Why that matters beyond McDonald's

This is the error this series exists to correct. A long corporate bond trading far below par is routinely written up as a signal that the issuer is in trouble. Sometimes it is. Here it plainly was not: the issuer's own risk premium halved and then halved again while the bond fell more than twenty points.

The sequence to check, in order, is the Treasury curve first and the spread second. If the curve explains the move, there is no credit story to tell.

What this does not say

It does not say stocks beat bonds. It says that on this entry date, for this issuer, over this window, the stock won and the bond's loss had an identifiable cause that was not the company. A different entry date gives a different answer, and elsewhere in this series a different mark date has reversed a result outright.

What the gap is pricing

A long bond bought at the bottom of the rate cycle and held into the top of it. The shareholder more than doubled the bondholder's money, but the interesting number is the spread: it tightened by roughly 200 basis points over the same period, meaning the market thinks McDonald's is a better credit now than it did in March 2020. The bond still lost most of its price. What repriced it was the risk-free rate, not the company. Anyone reading a falling long corporate bond as a warning about the issuer should start with the Treasury curve before reaching for a credit story.

This says what the market is charging for, not what anyone should buy. No position is implied.