By Paul Deckelman
New York, Feb. 2 – Netflix, Inc. priced $1.5 billion of new seven- and 10-year senior notes (B1/B+) on Monday in the middle of pre-deal market price talk on both tranches, high-yield syndicate sources said.
The quick-to-market issue was upsized from the originally announced $1 billion.
It consisted of $700 million of senior notes due 2022 that priced at par to yield 5½%, in the middle of yield talk of 5 3/8% to 5 5/8%, and $800 million of senior notes due 2025 that priced at par to yield 5 7/8%, in the middle of talk of a 5¾% to 6% yield.
The Rule 144A/Regulation S offering, which includes contingent registration rights, was shopped to potential investors via a mid-morning conference call several hours before the issue priced.
It was brought to market via joint bookrunners Morgan Stanley & Co. Inc., J.P. Morgan Securities LLC and Goldman Sachs & Co., along with co-manager Allen & Co. LLC.
The notes will be non-callable for the life of the issue.
The Los Gatos, Calif.-based distributor of movies, television shows and other content to subscribers plans to use the net proceeds of the offering for general corporate purposes, which may include content acquisitions, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.
| Issuer: | Netflix, Inc.
|
| Total amount: | $1.5 billion
|
| Security: | Senior unsecured notes
|
| Joint book-running managers: | Morgan Stanley & Co. Inc., J.P. Morgan Securities LLC, Goldman Sachs & Co.
|
| Co-manager: | Allen & Co. LLC
|
| Price: | Par
|
| Call protection: | Non-callable for life, other than via a make-whole call at T+50bps
|
| Change of control: | Put at 101% of principal plus accrued interest
|
| Ratings: | Moody’s: B1
|
| S&P B+
|
| Trade Date: | Feb. 2
|
| Settlement Date: | Feb. 5
|
| Distribution: | Rule 144A / Regulation S with contingent regulation rights
|
| Marketing: | Quick to market
|
|
|
| Tranche 1
|
| Amount: | $700 million
|
| Maturity: | Feb. 15, 2022
|
| Coupon: | 5½%
|
| Price: | Par
|
| Yield: | 5½%
|
| Spread: | 404 bps versus UST 2% due Feb. 15, 2022
|
| Price talk: | 5 3/8% to 5 5/8%
|
|
|
| Tranche 2
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| Amount: | $800 million
|
| Maturity: | Feb. 15, 2025
|
| Coupon: | 5 7/8%
|
| Price: | Par
|
| Yield: | 5 7/8%
|
| Spread: | 426 bps versus UST 7.625% due Feb. 15, 2025
|
| Price talk: | 5¾% to 6%
|
|
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