Netflix Inc. NASDAQ:NFLX, the streaming company, is returning to the U.S. investment-grade bond market for the first time since its debut offering two years ago, as slowing sales growth increases investor scrutiny of its outlook. The company is selling benchmark-sized notes due in 2036, with initial pricing discussed at approximately 0.95 percentage point above U.S. Treasuries, according to a person with direct knowledge of the offering. The transaction could provide investors with a fresh indication of credit-market confidence in Netflix as concerns about diminishing growth continue to weigh on sentiment.
Netflix plans to use the proceeds to repay roughly $1 billion of debt maturing later this year and support other corporate expenses, according to a company filing. The offering follows Netflix's first investment-grade bond sale in 2024, when the company raised $1.8 billion and received demand exceeding 10 times the amount offered. That earlier response suggested strong institutional appetite at the time, although the latest deal is entering the market after Netflix's unsuccessful attempt to acquire Warner Bros. Discovery Inc. NASDAQ:WBD, a media company, and a forecast pointing to slower growth.
Netflix shares have declined approximately 46% over the past year, reflecting concerns that the company may have lost some momentum. Its bonds due in 2056 traded at around 92.94 cents on the dollar on Monday, marking their lowest intraday price in a year, according to Trace data. BNP Paribas SA, Morgan Stanley, RBC Capital Markets Corp. and Wells Fargo Corp., the financial institutions managing the offering, are leading the transaction, and investor demand may help indicate how the market currently views Netflix's ability to manage its debt while navigating slower growth.