Moody’s Investors Service assigned a Ba3 rating to Netflix Inc.’s proposed offering of $2 billion of senior notes. The deal will bring Netflix’s gross leverage to 5.2 times for the 12 months ended Sept. 30, the agency said in a note. “However, despite the continuing issuances of debt to fund the company’s negative cash flows, we expect leverage to drop gradually over time as the transition from licensed content to produced original content levels off and newer international markets begin to contribute to profits and overall margins improve,” said Moody’s. Gross leverage is expected to fall back to around 6.0 times by end 2018 and to be below 5 times by end 2020 as EBITDA growth outpaces growth in content spend and debt. Netflix’s most active bonds, the 5.875% notes that mature in November of 2028, were barely changed on Monday, according to MarketAxess. The stock was down 0.5%.
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