Netflix to raise $2 bn debt for content acquisition

Internet TV network Netflix plans to raise $2 billion debt to invest in original content as it gears up to take on Disney+.

Netflix intends to use the net proceeds from this offering for general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital, and potential acquisitions and strategic transactions.

The announcement comes at a time when the streaming wars are getting heated. Disney+ and Apple TV+ will launch.

Netflix Chief Executive Reed Hastings has been vocal about the company’s plan to fund content acquisition by raising debt. “We’ll continue to finance our capital needs in the high-yield market,” Hastings wrote in his second-quarter shareholder letter.

In April, Netflix sold $1.6 billion in debt after raising $1.9 billion in November 2017, bringing its total debt to $8.4 billion. A majority of Netflix’s debt has been raised in the past three years.

Its long-term debt as a percentage of total capital has roughly doubled to 65% since the end of 2014.