Netflix reappears the corporate bond market and announces Monday’s plans to issue $ 2 billion in dollar and euro market bonds to help finance its major spending on original movies and television shows.
The company behind it shows such as House of Cards and Orange is New Black plans to spend more than $ 8 billion on its original content this year, up from $ 6 billion in 2017.
To finance this, Netflix has lost its debt rather than the stock market – even though its shares have risen over 73 percent this year. It increased last 1.9 billion dollars in April and 1
.6 billion dollars in October last year.
News about the bond issue comes less than a week after Netflix reported stronger than expected earnings and subscriber earnings for the third quarter. While the results and the accompanying optimistic fourth quarter management have helped deal with concerns about slower momentum, some analysts continue to be careful about the company’s cash flow rate.
Netflix forecasts $ 3 billion free cash burning this year and another $ 3 billion in 2019 – although it expects an improvement after that.
Long-term debt amounted to $ 8.3 billion as of 30 September, from the top of the $ 6 billion reported at the end of 2017. The amount spent on interest payments amounted to SEK 291.6 million for the first nine months of the year, compared to SEK 238 million for the whole of 2017.
Moody’s prices Netflix at Ba3 while S & P takes it to BB – both three hooks in “debris” territory.