Tag Archives: nflx

Netflix bond issue gets another ratings downgrade

F ollowing a similar move by Moody’s Investors Service last month, Standard & Poor’s on Monday cut its debt rating on Netflix (NFLX) and turned negative on the streaming video company’s outlook. Standard & Poor’s Ratings Services lowered its corporate credit rating on Los Gatos, Calif.-based Netflix to B+ from BB-. S&P said its outlook for Netflix is negative. S&P took the action because of Netflix’s planned offering of $1 billion in senior unsecured notes to fund the creation of original shows and its global expansion. “The downgrade and negative outlook reflect our expectation that Netflix will incur significant discretionary cash flow deficits over the next several years and that debt leverage will be high during that time,” S&P said in a press release. “Under the proposed financing plan, Netflix’s debt leverage will increase to about 5x (debt to earnings before interest, taxes, depreciation and amortization) by the…

Amazon Prime now tops Netflix in U.S. subscribers

Amazon.com (AMZN) now has 40 million U.S. members for its Amazon Prime subscription service, up about 50% from a year ago, Consumer Intelligence Research Partners said Tuesday. Amazon Prime offers free two-day shipping on millions of items, a video-on-demand service that competes with Netflix (NFLX), and other benefits. Amazon Prime costs $99 a year. If the estimate of 40 million subscribers is accurate, Amazon Prime now has more U.S. subscribers than Netflix, which reported 39.1 million domestic members as of the end of December. But most Amazon Prime members subscribe for the free, two-day shipping. A study released by CIRP last April found that 70% of Amazon Prime members stream videos through the service. Amazon is producing original shows and movies to attract more viewers. Its comedy-drama series “Transparent” starring Jeffrey Tambor recently won two Golden Globe awards, for Best TV Series and Best Actor…

Netflix debt burden worries Moody’s Investors Service

Netflix’s (NFLX) growing debt burden has rattled Moody’s Investors Service, which Friday downgraded the company’s debt rating and outlook. Moody’s downgraded Netflix’s Corporate Family Rating and senior unsecured debt rating to B1 from Ba3. It also changed the company’s rating outlook to stable from positive. Still, Netflix stock was up nearly 2% in midday trading in the stock market today. Netflix stock is up 25% since reporting better-than-expected Q4 results after the close Monday. Moody’s took the actions after the subscription streaming video service announced that it plans to increase its debt by at least $1 billion to fund international expansion and investment in original programming. Netflix’s risk profile will increase materially given expectations for persistent and significantly higher negative free cash flows, resulting from significant upfront payments related to original programming, Moody’s said. “This is a significant deviation from the company’s historical financial policies with regard…