Investment

Netflix mulls $2 billion bond issuance in return to junk market

Netflix/Bloomberg

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The proceeds will be used for general corporate purposes that may include investing in content, production and development.

Wednesday 24, April 2019

(Bloomberg) --Netflix is returning to the junk-bond market to fund its content expansion as the company comes under pressure from media giants including Walt Disney, AT&T and Apple.

In a statement, the streaming company said that it is selling $2 billion of bonds in a two-part offering denominated in dollars and euros.

The notes will mature in 10.5 years and cannot be bought back.

Morgan Stanley, Goldman Sachs Group as well as JPMorgan Chase, Deutsche Bank and Wells Fargo are managing the bond sale.

Netflix is coming off a quarter in which its forecast for new subscribers fell short of analysts’ estimates. It’s been raising prices in some of its largest territories, trying to shift toward profitability when the competition among other streaming services is mounting.

California-based Netflix has traditionally borrowed semi-annually following its first and third quarter results in April and October, respectively, amassing a $10 billion debt load in the process.

Reed Hastings, Netflix’s Chief Executive Officer, said that the issuance may not last much longer as the company will soon be able to fund itself.

Netflix is still expecting to burn through $3.5 billion of cash this year, but its financing needs will start to abate in 2020.

 

TAGS : Netflix bond sale, Walt Disney, AT&T, Apple TV

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