Netflix’s junk bonds boosted after S&P predicts strong subscriber growth this year

Netflix Inc.’s high-yield bonds ticked up Thursday, after S&P Global Ratings revised its outlook on the company’s credit, citing a stronger-than-expected operating performance in 2017.

Netflix NFLX, -1.03% “will continue to demonstrate significant strength as the leading streaming video on demand (SVOD) service despite increasing competition,” analyst Jawad Hussain wrote in a report as he revised his outlook on the company’s debt rating to positive from stable. S&P has a B-plus rating on Netflix, which puts it four notches into speculative, or “junk,” status.

Hussain welcomed the company’s EBITDA (earnings before interest, taxes, depreciation and amortization) expansion in 2017, after it raised prices but was still able to boost subscriber growth.

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