Netflix Inc. is once again tapping the corporate bond market with plans to issue $1.5 billion in high-yield, or “junk,” bonds to help finance its huge spending plans for 2018.

The company said it will use proceeds of the deal for working capital, including content acquisition and production, and even for potential acquisitions or other transactions. The company has said it will spend between $7.5 billion and $8 billion on content this year.

CreditSights said the deal is a single tranche of 10.5 year, non-call for life senior notes. Early price talks suggests a range of 5.75% to 6.00%, said analysts Lindsay Pacia Gibbons and Jay Mayers.

“We see this range as offering investors decent concessions compared to the outstanding curve,” they wrote in commentary. “We would add exposure to Netflix should the new issue maintain healthy concessions through pricing.”

The last time that Netflix sold bonds in October of 2017, it issued $1.6 billion of 10.5 year notes at a yield of 4.875%, which compared to its outstanding 2026 notes that were trading at 4.40%, said the commentary.

The analysts reiterated their market perform rating on Netflix’ outstanding bonds, and said that while they are positive on the operating outlook for the company in 2018, “this view is balanced by the expectation for further tapping of the high-yield market over the near term. If Netflix has to pay up to continue its steady stream of supply this could limit outperformance of the outstanding notes.”

Netflix had total debt outstanding of $6.5 billion at quarter end, up about $3.2 billion from the first quarter of 2017. Total cash on hand came to $2.6 billion at quarter’s end.

S&P Global Ratings said its B-plus corporate debt rating and positive outlook are not affected by the deal, as the company’s adjusted leverage will remain at about 4.1 times. “However, we expect adjusted leverage to increase slightly to the low- to mid-4x area as Netflix continues to borrow to invest heavily in content in 2018,” S&P analyst Jawad Hussain wrote in a note.

S&P is expecting Netflix NFLX, +0.78% to remain the leading streaming video-on-demand service, even as competition heats up, with Amazon.com Inc. AMZN, +5.69% already active in the field and Apple Inc. AAPL, +1.57% expected to follow suit.

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Hussain pointed to the company’s success in raising prices last year while growing its subscriber base. The company is expected to continue to spend heavily on original content to retain and expand that base and make its offering more attractive to consumers.

“This supports its ability to add subscribers while raising prices over time,” he wrote. “However, we expect the significant investment in content and marketing will result in free cash flow deficits in excess of $3 billion in 2018.”

Netflix last week wowed investors with first-quarter earnings that blew past earnings estimates. The company added 7.4 million more streaming subscribers, more than the 6.6 million expected, with 5 million of them outside the U.S.

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Higher subscription prices for the service, combined with the growing customer base, gave a huge boost to revenue — Netflix said its 43% year-over-year jump in streaming revenue was its best in history.

The company further surprised observers with net income of $290.1 million, more in three months than in all of 2016. If the company meets its second-quarter forecast of $358 million in profit, it will earn more in the first half of 2018 than all of 2017, when it reported an annual profit of $558.9 million.

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Netflix does not have pending debt maturities in the near term, said the CreditSights analysts. The next significant maturity is 2021, when $500 million of 5.375% notes mature.

The company’s most active bonds, the 4.875% notes that mature in April 2028, were last quoted at 96.50 cents on the dollar, to yield 5.332%, according to MarketAxess, or at a yield spread of 239 basis points over Treasurys.

The company’s 4.375% notes that mature in November of 2026, were trading at 96 cents on the dollar to yield 4.954%, or at a yield spread of 198 basis points over Treasurys, 1 basis point wider on the day, according to MarketAxess.

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On the equity side, shares were down 1.8% on Monday but have gained 68% in 2018 so far, while the S&P SPX, +1.05% has fallen 0.1% and the Dow Jones Industrial Average DJIA, +0.51% has fallen 1.1%.

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