Netflix ups bond offering to €1.3 billion

Netflix has upped its senior notes offering to €1.3 billion, upsizing the debt offering from a previously announced €1 billion.

Netflix is offering the notes to investors outside of the US and said that it expects the sale to close on May 2. The notes will mature on May 15, 2027, unless earlier repurchased or redeemed.

According to a Financial Times report, Netflix upped the offering on the back of high demand from investors, with one unnamed buyer claiming that, after going live, the sale had drew more than €5bn of orders by midday.

“Netflix intends to use the net proceeds from this offering for general corporate purposes, which may include content acquisitions, capital expenditures, investments, working capital and potential acquisitions and strategic transactions,” the SVOD giant said in a statement.

Netflix previously upped a US$800 million senior note offering to US$1 billion just hours after offering it to investors in October 2016. Netflix also raised US$1.5 billion by selling senior notes in February 2015.

In its most recent earnings report, Netflix said that it will spend more than US$1 billion in marketing its content this year as its slate of originals continues to expand, and will up its investment in programmatic advertising.

The company has famously pegged its annual content budget at some US$6 billion, although its high-stakes approach has not always won praise.

In a critical research note last November, Ovum analyst Angel Dobardziev said: “Netflix’s current business model burns massive and increasing amounts of cash, which we think is not sustainable.”

Ovum took issue with Netflix over how it accounts for its content spend, claiming it had “adopted a host of very aggressive content accounting assumptions that seek to paper over the deteriorating business economics and flatter its weakening profitability, both of which are the result of its spending beyond its means.”