Strategy’s STRD Credit Spread Tightens Amid Bitcoin Volatility
- The credit spread for Strategy’s junior preferred stock, Stride (STRD), tightened to a low of 8.12% on December 12.
- As of Monday, the spread widened back to nearly 9% as Bitcoin fell below $86,000.
- STRD raised $82.2 million from the sale of about one million shares during the week ending December 14.
- The issuance marked the largest single-week proceeds among Strategy’s preferred stocks since its introduction six months ago.
- STRD offers a yield premium of approximately 320 basis points over another series, STRF, despite similar dividend rates.
The tightening of STRD’s credit spread suggests stronger investor demand and improved perceptions of credit quality for Strategy’s offerings, particularly in light of its recent establishment of a $1.44 billion reserve to support dividends and bolster its financial position.
With the latest issuance representing a significant shift towards STRD, investors appear to view it as a more stable option compared to other preferred stocks amid fluctuating market conditions, evidenced by its record fundraising last week.
