Netflix Inc. said it plans to raise US$1.5 billion in debt to help finance its rapid expansion of original television and movie content.
It is the second time in a year that Netflix has raised debt to finance its growth. The video streaming service, which raised US$1.6 billion of debt last October, has been spending aggressively on original content to drive subscriber growth around the world.
Netflix beat Wall Street’s estimates for subscriber additions earlier this month, driven by hit original shows such as “Altered Carbon” and “Jessica Jones”, and said it looks to spend nearly US$8 billion on content in 2018. The company also reported long-term debt of US$6.5 billion at the end of first quarter and said it expects free cash flow to be negative in the second half of 2018.
Netflix had around US$2.6 billion in cash, according to the company’s latest quarterly report. The company said on Monday that it intends to use the net proceeds from the offering for general corporate purposes, which may include content acquisitions and production.
Netflix has been adding subscribers in Canada in recent months as growing numbers of households cancel their traditional cable TV subscriptions in favour of streaming content.
