Netflix offers $2 billion more in debt to fund its content spending

TechCrunch | 4/23/2019 | Staff
Tanya9 (Posted by) Level 3
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Netflix is raising another $2 billion in debt to fund its content spending and other expenses, the company announced this morning. The news comes ahead of the launches of new streaming service competitors from Disney, Apple, and AT&T’s WarnerMedia. It also follows Netflix’s offer of another $2 billion in debt back in October 2018.

The streaming service says it plans to use the debt funding for general purposes, including “content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.”

Funds - Notes - Series - US - Dollars

The funds will be raised through unsecured notes that will be issued in two series in both U.S. dollars and euros, it says.

Netflix spends a lot of cash to stay ahead of the competition and acquire subscribers. It believes that its investment in original content — shows and movies that users can’t find anywhere else, and that it owns the rights to — will help the company to generate revenues in the years ahead.

January - Netflix - Cash - Burn - Cash

In January, Netflix said its cash burn would peak in 2019, and its free cash flow deficit for 2019 will end up around $3.5 billion, CNBC notes.

This year, its content budget is expected to reach $15 billion, Variety reported earlier.

Debt - Netflix - Debt - Variety - Netflix

The additional $2 billion in debt will bring Netflix’s long-term debt to around $12.3 billion, Variety now points out. It also says Netflix hasn’t paid down any significant amount of...
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