Netflix Raising $400 Million in New Debt to Fund Original Content, European Expansion

/ Feb 4, 2014

VIS_NetflixMoney

Netflix plans to take on $400 million in additional debt to help finance more original content as well as its European expansion.

The streaming company disclosed in its Q4 earnings report that it has plans to significantly expand in Europe, while also continuing to plug away at its already-successful original programming strategy. To make that possible, Netflix now wants to raise $400 million in additional long-term debt, which would add to the $500 million in securities Netflix issued a year ago.

Without getting too much into the complicated financial legalese, Netflix intends to offer $400 million in senior notes due 2024 to qualified buyers. In the announcement, Netflix said it “itends to use the net proceeds from this offering for general corporate purposes, including capital expenditures, investments, working capital, and potential acquisitions and strategic transactions.”

In the company’s 10-K annual report filed with the SEC (via Variety), it said it plans to “significantly increase” investments in international expansion (following up on what CEO Reed Hastings and CFO David Wells said in the company’s Q4 letter to shareholders), as well as original content. In an effort to take advantage of favorable interest rates at the moment, Netflix is seeking the additional $400 million.

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