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Netflix offers $ 2 billion in debt to fund more original content



Reed Hastings, co-founder, chairman and CEO of Netflix, attends a Q & A during a Transatlantic Forum in Lille, France.

Sylvain Lefevre | Getty Images

Netflix will raise another $ 2 billion to fund additional content creation and other expenses, the company said Monday. The stock eased slightly after the news.

The company routinely incurs debt to top up its growing library of original television shows and films. Netflix offered new debt of $ 2 billion in April following the issuance of another bond issue a few months ago.

Netflix is ​​expected to continue its cash burn as competition increases with the launch of competing streaming platforms such as Apple's Apple TV + and Disney's Disney + as, as well as Peacock by NBCUniversal and HBO Max by WarnerMedia. In its earnings report for the third quarter of last week, the company downplayed the threat posed by these new streaming services and stated that its billion dollar budget allows it to take "daring" turns in new projects when needed ,

Beginning of the Year Netflix expects its cash consumption to reach its peak in 201

9 before easing. The company reiterated this forecast in its Letter to Shareholders, saying it could "spend more of our content internally", which should lead to improved free cash flow in 2020.

Netflix intends to use the proceeds for funds "content acquisitions, production and development, investments, investments, working capital and potential acquisitions and strategic transactions." According to Netflix, the interest rate, due date and other terms of the offer are determined by negotiation between the company and the initial purchasers.

Disclosure: NBC is part of NBCUniversal, the parent company of CNBC.


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