said it plans to issue junk-rated bonds denominated in dollars and euros. It did not specify maturities but said it would use the proceeds for a range of purposes, including content, production and development and potential acquisitions.
The company is facing highly competitive offerings from deep-pocketed rivals Walt Disney Co.
that will launch in November. Disney-plus is priced at just $6.99 a month compared with the $8.99 Netflix charges for its basic plan, and will include its entire library of films and TV shows, including the Marvel and Star Wars franchises. Comcast Corp.’s
The Apple TV+ offering is priced at $4.99 a month and will be free for one year with the purchase of a new Apple device. For now, the content slate looks slim compared with Netflix, but the iPhone maker is expected to grow through acquisition.
Just last week, Netflix acknowledged that the coming slew of competition may hurt new-subscriber growth. The company said it expects that subscriber growth will decline year-over-year in the usually strong fourth quarter and for the entire year, even with a strong slate of new shows.
“The launch of these new services will be noisy,” Netflix executives said in their quarterly letter to shareholders. “There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance.”
Netflix has mostly funded its content acquisition and production by issuing junk bonds, putting its long-term debt at about $12.5 billion. The company’s most active bonds, the 5.875% notes that mature in November of 2028, were last quoted at a yield spread of 271 basis points over comparable Treasurys, according to bond trading platform MarketAxess.