STRD Preferred Stock Draws Attention Amid New Issuance and Yield Debate
The U.S. 10-year Treasury credit spread on Strategy's STRD junior preferred stock narrowed to 8.12% on December 12, reaching a new low, before moving toward 9% on Monday following a drop in bitcoin below $86,000.
During the week ended December 14, Strategy sold $82.2 million of STRD via its at-the-market (ATM) facility, marking the largest weekly issuance of STRD since its launch. STRD has recently dominated the company's preferred-stock issuance, with other preferred shares such as STRF, STRK, and STRC contributing smaller amounts.
The tightening of the STRD spread is seen as a possible indication of stronger investor demand and an improved credit perception for Strategy's highest-yielding junior preferred stock. To bolster STRD's credit profile, Strategy added a $1.44 billion reserve sufficient to cover more than 21 months of dividends. Simultaneously, the company continues to accumulate bitcoin to support its balance-sheet collateral.
STRD yields roughly 320 basis points more than STRF, although both shares have similar stated dividend rates. This yield gap reflects capital-stack positioning rather than underlying fundamentals. Michael Saylor, Strategy's Executive Chairman, has stated that dividend payments on STRD are not at risk and attributes the yield difference to the capital structure.
Overall, STRD is part of Strategy's broader initiative to build a structured yield curve encompassing products ranging from conservative income to bitcoin-linked exposures.
