Netflix offers $2B in debt to fund content acquisitions, production

LAHQ_01 (1) Netflix
Last week the streamer reported its debt had reached USD$12.4 billion as of Sept. 30.

Netflix released its plans on Oct. 21 to offer approximately $2 billion in debt, in both U.S. dollars and euros, to finance content acquisitions, production and development.

Funds may also be used for capital expenditures, investments, working capital and potential acquisitions and strategic transactions.

In a letter to shareholders issued on Oct. 16, the streaming giant reported its debt had climbed to USD$12.4 billion as of Sept. 30, up from USD$10.4 billion in December 2018.

The company also stated its plans to expand its investment in local language original films and unscripted series for the third quarter of 2019. It will continue to focus its original offering as studios increasingly pull second-run content.

Netflix’s revenue for Q3 exceeded expectations, climbing to USD$5.2 billion. Though, the company said in the letter it anticipates “modest headwind” to its near-term growth as it faces an onslaught of competition from streamers such as Disney+, HBO Max and Apple TV+.

“Many are focused on the ‘streaming wars,’ but we’ve been competing with streamers (Amazon, YouTube, Hulu) as well as linear TV for over a decade,” the company stated. “In the long-term, though, we expect we’ll continue to grow nicely given the strength of our service and the large market opportunity.”

The interest rate, redemption provisions, maturity rate and other terms of the debt, to be offered in two series, will be determined by negotiations between Netflix and the initial purchasers, the company stated in a release.

This story originally appeared in Realscreen