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updated: 1/29/2013 9:28 AM

Netflix plans $400 million bond offering with eight-year notes

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Bloomberg News

Netflix Inc. plans to raise $400 million with eight-year bonds as the world's largest online video service prepares to refinance outstanding debt and boost funds for films and television shows.

Netflix intends to spend $225 million to redeem $200 million of 8.5 percent securities outstanding and to use remaining proceeds for general corporate purposes including capital expenditures and investments, the Los Gatos, California- based company said today in a statement. Netflix said last week it may offer bonds to help fund future original content.

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The issue would double Netflix's outstanding debt, excluding $200 million of convertible notes that pay no interest and can be swapped for shares at $85.80 each before December 2018. The stock closed yesterday at $162.11.

The new senior notes may be rated Ba3 by Moody's Investors Service, according to a person familiar with the offering, who asked not to be identified, citing lack of authorization to speak publicly.

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