Netflix is looking to raise another $1.6 billion from investors via a bond sale in order to fund new shows and finance possible acquisitions.
The deal, which will be the biggest bond sale in the history of the company, comes after stronger than anticipated subscriber growth in the third quarter and will help fund an expanding $7 billion to $8 billion budget for original content in 2018 as the online stream provider grows its movie and TV series line-up.
The company will issue new 10.5 year bonds due to mature in 2018 and are priced with a yield of 4.785 percent, according to investors tracking the sale. The price sale was in accordance with the quotes marketed to investors earlier in the day and slightly higher than the firm's existing debt that are due to mature in 2016, which traded on Monday with a yield of 4.4 percent. Sources knowledgeable with the proceedings said bankers had advertised order books for the $1.6 billion deal hitting around $2.5 billion.
Netflix is looking to publish 80 films next year, however, some analysts are concerned about the cash burn and debt interest cost. The video streaming provider's latest debt fundraising will be the fourth time in three years it raised over $1 billion by selling bonds.
So far this year, the Netflix's stock has risen by over 50 percent this year due to solid subscriber growth. The firm has now more than 109 million global client base and has added so far 15.5 million to date this year.