Netflix today said it was raising a very large lump of debt for the typical laundry list of uses that you’ll find in a filing with the SEC — though, the timing comes as its content costs may hit as much as $8 billion next year.
The announcement comes off a strong earnings report last week, where Netflix once again beat expectations for its subscriber growth. The company also said it expects to spend between $7 billion and $8 billion on original content in 2018, up from around $6 billion on original content this year. To be sure, original content — and racking up those Emmy awards — is critical to Netflix’s future as it looks to convert those high-quality shows (and high Metacritic scores) into new subscribers.
Netflix said it’s expecting to raise $1.6 billion in debt, though the announcement was pretty short and didn’t have a ton of detail. Here’s the boilerplate text in the filing:
The interest rate, redemption provisions, maturity date and other terms of the Notes will be determined by negotiations >between Netflix and the initial purchasers.
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.
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