EXHIBIT 8
[LETTERHEAD OF CLEARY, GOTTLIEB, STEEN & HAMILTON]
May 11, 1998
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60523
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
Salomon Brothers Inc
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10035
Ladies and Gentlemen:
We have acted as special U.S. tax counsel to McDonald's
Corporation, a Delaware corporation (the "Company"), in connection with
the Company's offering pursuant to a registration statement on Form S-3
(No. 333-14141) of $250,000,000 aggregate principal amount of its 5.90%
Reset Put Securities (REPS(SM)) due 2011 (the "Securities") to be issued
under a senior debt securities indenture dated as of October 19, 1996 (as
supplemented by Supplemental Indenture No. 2 dated as of May 11, 1998,
the "Indenture") between the Company and First Union National Bank, as
trustee. Such registration statement, as amended when it became
effective, but excluding the documents incorporated by reference therein,
is herein called the "Registration Statement", and the related
prospectus, as supplemented by the prospectus supplement dated May 6,
1998, and as first filed with the Securities and Exchange Commission
pursuant to Rule 424(b)(2) under the Securities Act of 1933, as amended
(the "Act"), but excluding the documents incorporated by reference
therein, is herein called the "Prospectus".
This opinion letter is furnished pursuant to Section 5(d)(v)
of the underwriting agreement dated May 6, 1998 (the "Underwriting
Agreement") between the Company and the several underwriters named in
Schedule II thereto.
In connection with the issuance of the Securities, the Company
and Morgan Stanley & Co. Incorporated have entered into a calculation
agency agreement dated as of May 11, 1998 (the "Calculation Agency
Agreement"). In addition, the Company and Morgan Stanley & Co.
International Limited have entered into a securities purchase option
agreement dated as of May 11, 1998 (the "Securities Purchase Option
Agreement").
As used herein, the term "Transaction Documents" refers
collectively to the Indenture, the Underwriting Agreement, the
Securities, the Securities Purchase Option Agreement and the Calculation
Agency Agreement. Capitalized terms used but not defined herein have the
respective meanings ascribed to them in the Indenture.
In arriving at the opinions expressed below, we have reviewed
the following documents:
(a) an executed copy of the Underwriting Agreement;
(b) the Registration Statement and the documents incorporated
by reference therein;
(c) the Prospectus and the documents incorporated by reference
therein;
(d) a form of the Securities;
(e) an executed copy of the Indenture;
(f) the documents delivered by the Company at the closing
pursuant to the Underwriting Agreement, including copies
of the Company's Certificate of Incorporation and By-Laws
certified by the Secretary of State of the State of
Delaware and the corporate secretary of the Company,
respectively;
(g) an executed copy of the Securities Purchase Option
Agreement; and
(h) an executed copy of the Calculation Agency
Agreement.
In addition, we have reviewed the originals or copies certified or
otherwise identified to our satisfaction of all such corporate records of
the Company and such other instruments and other certificates of public
officials, officers and representatives of the Company and such other
persons, and we have made such investigations of law, as we have deemed
appropriate as a basis for the opinions expressed below.
In rendering the opinions expressed below, we have assumed and
not verified that each of the Transaction Documents is the valid, binding
and enforceable agreement of each of the parties thereto.
Our opinion is based on the Internal Revenue Code of 1986, as
amended, U.S. Treasury regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as of the date
hereof and all of which are subject to change, possibly on a retroactive
basis. In rendering this opinion, we are expressing our views only as to
the federal income tax laws of the United States of America.
Subject to the assumptions, qualifications, and conditions set
forth herein and in the Prospectus under the heading "Certain United
States Federal Income Tax Consequences", it is our opinion that:
1. Under current law and assuming full compliance with the
terms of the Transaction Documents, although there is no authority on
point characterizing instruments such as the Securities, and the matter
is not free from doubt, the Securities should be treated as fixed rate
debt instruments that mature on the Coupon Reset Date.
2. The statements set forth in the Prospectus under the
heading "United States Federal Income Tax Consequences", insofar as such
statements purport to summarize certain federal income tax laws of the
United States, constitute a fair summary of the principal United States
federal income tax consequences of an investment in the Securities.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to this firm under the
heading "Legal Opinions" in the Prospectus. In giving such consent, we
do not thereby admit that we are "experts" within the meaning of the Act
or the rules and regulations of the Commission issued thereunder with
respect to any part of the Registration Statement, including this
exhibit.
Except for the opinions expressed above, we express no opinion
as to any other tax consequences of the transaction to any party under
federal, state, local or foreign laws. This opinion addresses the legal
consequences of only the facts existing or assumed as of the date hereof.
Further, this opinion is being furnished to you solely for your benefit
and is not to be used, circulated, quoted or otherwise referred to for
any purpose without our prior written consent in each instance, except
that you may refer to this opinion in connection with the Prospectus
under the heading "Certain United States Federal Income Tax
Consequences". We disclaim any obligation to update this opinion letter
for events occurring or coming to our attention after the date hereof.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By /s/ Erika W. Nijenhuis
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Erika W. Nijenhuis, a Partner