Where STRC Sits in the Capital Stack

Strategy has a layered capital structure with several types of securities. When a company faces financial distress, its obligations are paid from the top of the stack down. Securities higher in the stack are safer but typically offer lower returns. Securities lower in the stack carry more risk but offer more potential upside.

Understanding where STRC sits in this stack helps you evaluate what happens in a worst-case scenario and how your claim compares to other investors.

Credit rating

S&P Global assigned Strategy a B- issuer credit rating with a stable outlook in October 2025. On S&P's scale, this is below investment grade (BBB- and above) and falls in the high-yield category. S&P cited high bitcoin concentration, narrow business focus, and low dollar liquidity.

A B- with stable outlook is not a distressed rating. It reflects the unconventional nature of Strategy's balance sheet. Having an S&P rating at all is significant because many institutional investors and funds cannot allocate to unrated securities. Strategy's CFO noted the rating would "substantially expand the addressable market" for the company's securities.

The rating was issued in October 2025. Since then, Strategy has grown its USD reserve to $2.25 billion, strengthening the credit profile.

Source: S&P Global Ratings, October 2025. Strategy Q4 2025 earnings, February 5, 2026.

What this means for you

If Strategy ever faced severe financial difficulty, the convertible note holders would be paid first. Then STRF holders. Then STRC holders. Then STRE holders. Then STRK, then STRD, and finally common stockholders. This means STRC is safer than common stock but riskier than the senior debt.

In practice, a company needs to be in very serious trouble before preferred stockholders face losses. The debt holders above you would need to be made whole first, but the preferred and common holders below you would absorb losses before you do.

STRC dividends are cumulative

This is an important protection. "Cumulative" means that if Strategy ever skips a dividend payment, the unpaid amount accrues and must be paid before any dividends can be paid to junior preferred (STRK, STRD) or common stockholders. The company cannot simply skip your dividend and move on. It remains an obligation until paid.

How the preferred series compare

STRC is the only preferred series with a variable rate and monthly payments. The others pay quarterly at fixed rates. STRC sits between STRF (senior to it) and STRE (junior to it) in priority.