Analysis: The credit risk of Strategy has eased as its preferred stock value exceeds that of convertible bonds.

PANews January 22 News, according to CoinDesk, the credit risk of Bitcoin Treasury company Strategy has eased, as its perpetual preferred stock has a nominal value of $8.36 billion, surpassing the $8.2 billion in convertible debt. This capital structure shift to permanent capital reduces refinancing risk and balance sheet volatility. Convertible bonds carry maturity refinancing risk and volatility linked to stock prices, while perpetual preferred stock does not require principal repayment and pays fixed dividends, with a priority level between common equity and debt. The company’s preferred stock portfolio includes four instruments, with an annual dividend total of approximately $876 million. Additionally, Strategy holds $2.25 billion in reserves to improve dividend coverage and reduce short-term financing risk. The number of common shares outstanding has increased from 76 million in 2020 to over 310 million, which may alleviate dilution pressure from future bond conversions.