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Netflix Ups Bond Offering From $800M to $1 Billion

24 Oct, 2016 By: Erik Gruenwedel

Netflix Oct. 24 upped a previous $800 million 4.375% senior notes offering (due 2026) to $1 billion. The bond sale is being offered to qualified institutional buyers and is expected to close Oct. 27. Interest on the notes will be payable in cash semi-annually, beginning May 15, 2017.

Netflix said it intends to use the funds for general corporate purposes, which include content acquisitions, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.

With the subscription-streaming video pioneer pledging to reach 50% original content, it has significantly upped its spending budget ($6 billion) on production of original movies and TV series.

Netflix ended its most-recent fiscal period with $14.4 billion in third-party content license obligations — up $4.4 billion from the previous-year period.

Interestingly, the move toward in-house productions translates into less spending on content from third-party sources, including Hollywood studios and TV production companies. Indeed, a recent study by StreamingObserver.com found only 31 movies from the IMDb Top 250 list are available on the service.

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