Netflix raising $1.6B in debt to fund acquisitions and content production

By : |October 24, 2017 0

Netflix is acquiring an additional $1.6 billion in debt to fund “content acquisitions, production and development,” among other “general corporate purposes,” the streaming giant said on Monday. It is the sixth time the company has issued senior notes since 2013.

Last week, the company posted strong earnings with impressive subscriber growth. Netflix also said it expects to spend between $7 billion and $8 billion on original content in 2018, up from around $6 billion on original content this year.

Netflix said it’s expecting to raise $1.6 billion in debt. “The interest rate, redemption provisions, maturity date and other terms of the Notes will be determined by negotiations between Netflix and the initial purchasers,” the company said in the announcement.

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.”

Original content is the main driver of Netflix’s subscriber growth, so it makes sense that it would want to spend more money in the area. The company reported a total net addition of 5.3 million subscribers in the third quarter, easily outpacing the 4.5 million additions that Wall Street was expecting.

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