×
You will be redirected back to your article in seconds

Netflix Raises $1 Billion More Debt to Fuel Original Content

UPDATED, 5:10 p.m. PT: Netflix said it is raising $1 billion through a new debt offering, bringing its long-term debt load to more than $3 billion.

The offering was upsized from an aggregate principal amount of $800 million originally announced Monday morning. The debt transaction is expected to close on Oct. 27, subject to customary closing conditions.

As of Sept. 30 Netflix had $2.37 billion in long-term debt and during the third quarter recorded $35.5 million in interest expense. Execs had previously said the company would be seeking to raise additional debt.

In announcing the offering, Netflix issued a boilerplate statement about the new debt, saying it intends to use the funds “for general corporate purposes,” which may include content acquisitions, capex, investments, working capital and potential acquisitions and strategic transactions.

But a significant portion of its spending is related to content, and Netflix as a long-term goal is targeting about 50% of the TV shows and movies on its service to be original productions. In 2017, Netflix has said content spending will be about $6 billion on a profit-and-loss basis.

Upcoming Netflix originals slated for 2017 include season 2 of popular supernatural drama “Stranger Things” (pictured above), street-hero series “Marvel’s Iron Fist,” the third and final season of “Bloodline,” and a talk show from Bill Nye. The company recently bowed season 3 of “Black Mirror,” a mind-bending sci-fi anthology series, and season 2 of “Narcos” (renewed for two more seasons). On Nov. 4, Netflix is set to premiere “The Crown,” a drama chronicling the early life of Queen Elizabeth II.

Netflix’s streaming-content obligations at the end of the third quarter of 2016 were $14.4 billion (costs that are amortized over the life of the license terms), up $1 billion sequentially. The company said the increase reflects the addition of both new original and non-original content to its library, as well as expanded rights for new territories.

Netflix’s $1 billion in new debt will carry an interest rate of 4.375% with the senior notes due 2026. The notes will mature on Nov. 15, 2026, unless Netflix repurchases or redeems them earlier.

More Digital

  • Nancy Pelosi

    Facebook on Defensive Over Fake Pelosi Video

    Facebook faced growing criticism this week over its decision not to remove a video that was doctored to suggest that House Speaker Nancy Pelosi was intoxicated during a recent public event. The video, which has been viewed more than 2.5 million times, had been slowed down notably, giving the impression that Pelosi was slurring her [...]

  • Little-Black-Mirror-Maia-Mitchell

    Netflix Launching 'Little Black Mirror' Video Series Starring Maia Mitchell, Lele Pons, Rudy Mancuso, Juanpa Zurita and More

    To promote next month’s premiere of “Black Mirror” season 5, Netflix is launching a short video series — “Little Black Mirror,” with a cast that includes an ensemble of Latinx social-media stars. The three “mini-stories,” aimed at Spanish-speaking audiences, are inspired by the tech-dystopian universe of Charlie Brooker and Annabel Jones’ anthology series. “Little Black [...]

  • Twitter

    Twitter Permanently Bans Anti-Trump Krassenstein Brothers, Who Deny They Broke Platform's Rules

    Twitter permanently suspended the accounts of Ed and Brian Krassenstein — progressive political activists famous for trolling Donald Trump and his supporters — with the company alleging the brothers used bogus accounts to amplify their reach on the platform. “The Twitter Rules apply to everyone,” a Twitter rep said in a statement. “Operating multiple fake [...]

  • Snapchat

    Snap in Talks to License Music to Let Snapchat Users Embed Songs in Posts

    Snap wants to up Snapchat’s music game. The company has been in negotiations with music companies including the big three — Sony Music Entertainment, Universal Music Group and Warner Music Group — to license song catalogs for the Snapchat app, according to two industry sources familiar with the talks, confirming a Wall Street Journal report. [...]

  • T-mobile - Netflix - John Legere

    T-Mobile Passes Netflix Price Hike Through to Subscribers

    T-Mobile is getting ready to raise prices for subscribers who have taken advantage of its “Netflix On Us” promotion: The mobile carrier will begin charging existing customers who have participated in the promotion an additional $2 per month to account for Netflix’s recent price increase. Consumers will see their bill go up starting on 6/2. [...]

  • Oona King

    Snap Hires Google Exec Oona King as First VP of Diversity and Inclusion

    Snap continues to fill out the ranks of its revamped leadership team: The Snapchat parent tapped Oona King, most recently Google’s director of diversity strategy and a former member of British Parliament with the Labour Party, as its first VP of diversity and inclusion. King, who starts at Snap on June 11, is also the [...]

More From Our Brands

Access exclusive content