Netflix Seeks to Raise $1 Billion in Debt Offering

Despite saying on Tuesday it had ample liquidity, the move continues Netflix's tradition of tapping debt markets to raise money for its investment needs.
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Netflix  (NFLX) - Get Report announced on Wednesday that it intends to raise roughly $1.0 billion in U.S. dollar and euro-denominated notes in two series.

The streaming video giant said it intends to use the net proceeds for “general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.” As of the end of March, Netflix had $14.17 billion in debt. 

In its Q1 earnings announced on Tuesday after the close in which it blew away subscriber forecasts, Netflix said the shutdown on production due to the coronavirus pandemic had reduced its spending, leaving it with about $5.2 billion in cash at the end of the quarter, along with an undrawn $750 million credit facility.

Netflix noted that combined with its improved free cash flow outlook for 2020, “we have more than 12 months of liquidity and substantial financial flexibility.”

Nevertheless it noted that its “financing strategy remains unchanged -- our current plan is to continue to use debt to finance our investment needs.”

Netflix shares were down 3.1% to $420.73 on Wednesday morning and are up about 30% year to date.