About $225M of the proceeds from the $500M offering it announced today — senior notes due in 2021 paying interest at 5.375% a year — will be used to retire the company’s $200M in 8.50% senior notes that are due in 2017. But with Netflix‘s new original series, House Of Cards, making its debut on February 1, some investors wonder whether the company needs the remainder to help it handle its steep content payment commitments. Some $2.3B of Netflix’s $5.6B in streaming content obligations will come due in the current fiscal year, Wedbush Securities’ Michael Pachter says. The new debt, he believes, “is necessary to solve near-term cash flow problems, and indicates the low likelihood of positive cash flow for the year.” Netflix’s debt, along with its investments to expand overseas, make it “a risky investment.” Moody’s Investors Service also considers Netflix’s new debt to be risky, giving it a Ba3 rating. The debt assessment firm believes that some of the cash will be used to pay for “investments in original programming, which require more up-front cash payments” than library titles. Despite their concerns, shares in the home video company closed today at $169.12, +4.3%. They’re up 63.8% since last Wednesday, when Netflix reported better than expected year-end earnings.

In addition to the debt offering, Netflix said today that it will exercise an option that could convert $200M in notes due in 2018 into stock. The debt is owned by longtime Netflix backer Technology Crossover Ventures and the terms now look sweet. The conversion would enable it to collect stock at $85.80 a share — as long as Netflix remains at or above $111.54 for at least 50 out of 65 trading days.