In addition to its projected spent of $15 billion on content for 2019, Netflix is adding to its debt load once again. On Monday, the company announced plans to add approximately $2 billion, in both U.S dollar and euro denominations, to finance content acquisitions, production and development. Funds may also be used for capital expenditures, investments, potential acquisitions and strategic transactions.
In September, Netflix reported $12.43 billion in debt, up from $10.36 billion at the end of 2018. The latest proposed debt offering would be the eighth time in the last five years that Netflix is raising $1 billion or more through debt. The streaming giant last raised $2.2 billion in junk bonds in April 2019, Variety said.
“With our quickly growing revenue base and expanding operating margins, we will be able to fund more of our content spending internally,” the company told shareholders in its October 16 letter. “As we move slowly toward a positive free cash flow, our plan is to continue to use the high-yield market in the interim to finance our investment needs,” it added.
To date, Netflix has not paid down any significant amount of the long-term debt. It paid $160.7 million in interest expense for Q3 (about 3.1% of quarterly revenue) compared with $108.9 million (2.7% of revenue) in the year-earlier period.
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