Netflix plans to raise $2 bln to fund new content

Lloyd Doyle
October 22, 2018

Netflix is again going to debt markets to fund its enormous appetite for content, announcing plans Monday to raise $2 billion in financing through debt securities.

The streaming giant said the debt will be in the form of senior notes denominated in US dollars and euros. Netflix disclosed a total debt load of $11.83 billion in a September 30 filing, according to Reuters.

Netflix bond prices were little moved immediately after the announcement, but can be expected to fall, as the additional debt adds to the company's credit risk. Netflix needs more cash because it has been spending more money than its business generates since its expansion into original programming with the 2013 release of "House of Cards". "We recognize we are making huge cash investments in content, and we want to assure our investors that we have the same high confidence in the underlying economics as our cash investments in the past", Netflix said in an October 16 letter to shareholders, per Variety.

Netflix shares surged last week after the company easily surpassed Wall Street's projections for its subscriber growth in the third quarter. Netflix's free cash flow in Q3 2018 was $859 million; the same quarter a year earlier was $465 million.

Netflix said in April it planned to raise $1.5 billion in debt, after raising $1.6 billion in October past year, bringing the total to about $5 billion.

Other reports by Iphone Fresh

Discuss This Article