Netflix wants to take on another $2 billion in debt

Netflix has spent massive amounts of money to build its streaming empire. Now it is looking toward debt markets to fund even more shows.

The streaming service announced Monday that it plans to take on $2 billion in new debt by offering unsecured bank notes.

The money will be used for “general corporate purposes.” Netflix (NFLX) says that could include content acquisitions and production costs, along with other investments.

It’s the third time in a year that Netflix has raised debt this way. Last October, the company offered $1.6 billion in notes. There was another round in April for $1.9 billion.

The news comes on the heels of a great quarter for Netflix. The company announced last Tuesday that it has more than 137 million subscribers, about 130 million of whom pay for the service.

But Netflix knows it will have to spend a lot of money if it wants to stay on top. The market for streaming services is getting incredibly crowded. Next year, heavyweight competitors such as Disney (DIS) and AT&T’s (T) WarnerMedia division will launch their own services. (AT&T owns CNN.)

New competition also means Netflix will likely have less licensed content to round out its library. Disney, for example, has said it is pulling its content from Netflix ahead of the release of its service.

Netflix’s strategy is to increase the amount of original content it makes and distributes, which has led to some eye-popping totals. The company said last year that it expected to spend about $8 billion on content on 2018. Analysts at the research firm Cowen say the company could actually spend as much as $13 billion on content this year.

It’s making some big investments with that money. Netflix recently poached TV giants Shonda Rhimes and Ryan Murphy to make exclusive content, for example.

Netflix said last week that it expected negative free cash flow about about $3 billion this year, and its expectations for next year are similar. Free cash flow measures how much cash is generated after the company covers investments in its business.

Shares of Netflix stock shot up about 8% the day after the company reported earnings last week, but the price has since fallen back down.

Moody’s assigned the latest offering a BA3 or “junk” rating, but added that it expects Netflix to eventually be able to pay off its debts “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.”

The firm said Netflix’s strategy of building out its own original content library has “positive long-term implications,” adding that a library of owned content instead of just licensed content is valuable to both consumers and investors.

There are risks, though. Moody’s said it could downgrade Netflix even further if its negative cash flow levels continue to be high, or if competition starts eroding the company’s subscriber numbers.