Analysts gave mixed reactions on Tuesday to Netflix saying it...

Netflix will use the remaining proceeds for “general corporate purposes, including capital expenditures, investments, working capital and potential acquisitions and strategic transactions,” it said. Moody’s, which assigned a Ba3 rating to the offering, assigns Ba ratings to investments it considers “speculative” and “subject to substantial credit risk,” according to its website. Moody’s believes Netflix “regained some positive momentum in the past few quarters, adding” more than 2 million U.S. streaming subscribers in the 1ast quarter of 2012, and is “on the path to meeting or exceeding our expectations of at least 4 million net additions per year along with growth in operating margins,” Moody’s said in a news release. The increase in debt “raises gross debt leverage,” but Moody’s said that’s “mitigated by Netflix’s significant cash balance” of $748 million as of Dec. 31 including short-term investments. Moody’s projected that Netflix will use part of its cash towards investments in original programming that “require more up-front cash payments, but expect it to maintain cash balances that are close to or exceed its funded debt levels.” Standard & Poor’s assigned the debt offering an issue-level rating of BB- with a recovery rating of 3, saying its rating outlook was “negative based on an increase in debt leverage as well as our expectation for negative discretionary cash flow in 2013 and possibly into the first half of 2014, resulting from increased investments in original programming.” Original programming is “the primary cause of discretionary cash flow deficits as it requires more upfront payments and the return on investment can be highly uncertain,” said S&P. The Netflix strategy “raises business and financial risk, and will likely consume liquidity at least over the near term,” said S&P. The Netflix offering will “likely provide interest rate relief” and “temporary breathing space from hefty content deals,” said Wedbush analyst Michael Pachter. The offering “reflects the continuing cost escalation” of Netflix’s streaming deals, he said. Pachter is “confident” that Netflix can lower its interest rate, but believes “the excess amount borrowed” will be used “primarily to pay third-party content providers,” he said. The debt is “necessary to solve near-term cash flow problems, and indicates the low likelihood of positive cash flow for the year,” he said. Original content is “likely to lower” Netflix’s “dependency on third-party content over time,” but “we do not expect a critical mass for many years,” and he believes Netflix’s “lack of free cash flow and the risk incurred by increasing debt makes Netflix a risky investment,” he said. Netflix shares closed 4.3 percent higher Tuesday at $169.12.