LOS ANGELES – Netflix announced today that it will offer up $1 billion in debt, which Netflix plans to use on content development.
Netflix CEO Reed Hastings and Netflix CFO David Wells told investors last month they were planning to raise at least a billion dollars of debt, largely in part because favourable interest rates.
“Over the next few years we expect to continue financing our original content expansion with long-term debt,” Hastings and Wells wrote in the letter. “As long as the maturities are spread out, and the interest cost is built into our content budgets, we think long-term debt is the best way for Netflix to finance the production of content
Netflix noted that the interest rate, maturity date and other terms of the debt will be determined via negotiations with the initial purchasers.”
As of the end of 2014, Netflix reported $900 million in long-term debt on its balance sheet.