BELLEVUE, WA -- Coinstar Inc. disclosed that it's going to be offering more in bonds to investors than was previously announced. The company that operates its namesake coin-counting machines and Redbox DVD movie rental kiosks is seeking to raise $350 million by selling six-year senior unsecured notes (bonds) to private investors. That's $50 million more than previously announced on March 4.
The notes will carry a 6% annual interest rate, up to 1% higher than was earlier expected due to concern over the long-term viability of the Redbox automated DVD-rental business, Coinstar's main revenue source. The sale will close on March 12.
Last month, Coinstar said its fourth-quarter profit fell 27%, hit by higher expenses from new ventures, while Redbox revenue growth slowed. The Bellevue, WA, company recently entered the streaming video business in a bid to compete with online companies like Netflix Inc. and Amazon.com Inc., and is preparing to launch other vending services. These new undertakings, Coinstar reported, drove expenses up 11% during the quarter that ended Dec. 31. | SEE STORY