Disclaimer: The analyst, who wrote this article, owns shares in the strategy.
Strategy (MSTR), under the leadership of executive chairman Michael Saylor, may have just completed his largest preferred share issue to date with an STRC (stretch) that offers that Strd, Strf and Strk preferred shares to build the company’s credit yield curve.
Among these, STRC is ranked high in seniority and low in expected volatility. It adds a new brief layer to the strategy financing mix and diversifies how the company can raise capital for BTC acquisition.
According to a fidelity alert on X, the agreement is 28 million shares that are priced at $ 90 each of a total of over $ 2.52 billion. This represents a dramatic increase from the original $ 500 million target, announced just days earlier, and emphasizes the company’s continued ambition to aggressively expand its Bitcoin BTC holdings.
STRC is senior, eternally preferred stock that offers a monthly dividend designed to appeal to yield-seeking investors who want stability near face value. At the time of supply, STRC had an effective yield of 9.5% -10.0% paid monthly. It contains mechanisms to maintain a trading area close to $ 100, including adjustable yield speeds, secondary issuing windows and call options over pairs.
The tool kit includes raising dividends and stopping sales when the STRC trades under $ 99, or issuing new shares and calling the stock if it rises over $ 101. These handles are designed to create a self -correction system that promotes market stability while offering attractive returns in the current interest rate environment.
Any breakdowns in the yield are limited to 25 basic points plus the maximum decrease in one-month secured financing speed overnight (SOFR) during the period.
Compared to conventional credit options for short -lived, Strc stands out and offers more than twice the 4%available from money market funds and treasury. It is targeted at investors looking for higher yields without significant pricing volatility, and places it competitive against traditional instruments such as commercial paper and bank deposits.
