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Netflix to raise $1.9 billion in debt

Netflix has priced a bond offering of US$1.9 billion, which it plans to use for “general corporate purposes” – including content acquisitions, production and development.

The senior note offering was upped from US$1.5 billion, which was initially announced yesterday. The sale for the revised amount expected to close on April 26, 2018.

The notes will mature on November 15, 2028, unless earlier repurchased or redeemed. Interest will be payable in cash semi-annually in arrears, beginning on November 15, 2018.

“Netflix intends to use the net proceeds from this offering for general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions,” the company said in a statement.

The news comes a week after Netflix announced strong first quarter results, adding a record number of first quarter subscribers and growing its streaming revenues by 43% year-on-year.

In its letter to shareholders, the SVOD giant said that it will spend US$7.5-US$8 billion on a profit and loss basis on content in 2018 across a wide variety of formats – series, films, unscripted, docs, comedy specials and non-English language content.

In February, Netflix CFO David Wells told delegates at the Morgan Stanley Technology, Media and Telecom Conference that he expects Netflix’s 2018 content spend to result in 700 originals on the service by the end of the year.

The latest bond offering follows similar rounds of debt financing in recent years. Netflix made a senior notes offering of €1.3 billion in April 2017 and a US$1 billion offering in October 2016. It also raised US$1.5 billion by selling senior notes in February 2015.

Tags: Debt, Netflix, SVOD