Before Netflix (NASDAQ:NFLX) delivered its rock-solid first-quarter report a week ago, I was expecting to hear that the company would soon raise more cash on the bond market. Now, armed with an improved credit rating and surging EBITDA profits, the streaming video giant is doing exactly that.

One-dollar bill folded into an arrow pointing upward, origami-style.

Image source: Getty Images.

What's new?

Early Monday morning, Netflix announced that it will raise roughly $1.5 billion from another bond sale. No surprise -- the company has been selling senior notes every six months  like clockwork since autumn 2016.

The magnitudes of these cash-raising moves had generally increased each time. Starting at $800 million, Netflix then took in 1.3 billion euros, and then another $1.6 billion. This time, the company is easing back to $1.5 billion.

As always, these funds will be used for "general corporate purposes," but mostly to back Netflix's cash-intensive creation of original content.

The exact terms have not yet been made public, but Netflix will probably release them this week. The company's bond sales typically go from the first announcement to done deal in a matter of days. Based on its most recent debt offerings, I'd expect the new debt papers to carry a 10-year term, and a coupon rate  lower than the 4.875% seen in October's offering. (Better credit rating, you know.)

Until then, here's what Netflix's long-term debt situation looks like in greater detail:

Date of Issuance

Principal Amount

Coupon Rate

Maturity

October 2017

$1.6 billion

4.875%

2028

May 2017

$1.5 billion*

3.625%

2027

October 2016

$1 billion

4.375%

2026

February 2015

$700 million

5.5%

2022

February 2015

$800 million

5.875%

2025

February 2014

$400 million

5.75%

2024

February 2013

$500 million

5.375%

2021

Data Source: Netflix. *The May 2017 bond offering was euro denominated.

What does this mean?

Netflix is keeping the subscriber-growth pedal to the metal by pouring debt-based funds into the development of more original content.

The theory is that the cash investments will pay off over time, since Netflix owns these films and series, and gets to use them basically forever. Licensing content made by other studios means recurring royalty and licensing payments over the long run, and Netflix is trying to reduce that particular class of burdensome expenses. So the company invests in high-budget, high-quality content like Stranger Things, Okja, Altered Carbon, and Mindhunter, expecting these titles to keep subscribers coming back for years and years.

The upfront costs of this strategy are high, but the brand-building and subscriber-growth benefits should pile up. In time, incoming profits should start to outweigh its content production budget, allowing Netflix to pay down its debts instead of incurring more. Credit rating firm Moody's expects that turning point to arrive as early as 2022.

But for now, taking on more debt to keep the good times rolling is just Netflix's standard operating procedure.

Anders Bylund owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.