STRF Emerges as Strategy's Standout Credit Instrument After Nine Months of Trading

Source: CryptoNewsNet Original Title: STRF Emerges as Strategy’s Standout Credit Instrument After Nine Months of Trading Original Link: Performance and Valuation

Strategy’s senior perpetual preferred stock, STRF, has emerged as the company’s most successful credit instrument since its launch in March. Trading at $110, STRF has risen 36% from issuance and has rebounded 20% from its Nov. 21 low of $92. This recovery period coincided with bitcoin’s local bottom near $80,000, highlighting the strong correlation between STRF and bitcoin movements.

Dividend and Structure

STRF occupies the top tier of Strategy’s preferred structure. It pays a fixed 10% annual cash dividend and features governance rights plus penalty-based step-ups if payments are missed. Even with its premium pricing pushing the effective yield down to about 9.03%, demand remains strong due to the security’s senior protections and long-duration credit profile.

Credit Spread Dynamics

In late October, executive chairman Michael Saylor highlighted a growing credit spread between STRF and the junior STRD. The spread measures the extra yield investors demand to hold higher-risk junior securities, which is now at 12.5%. At the Nov. 21 low, that differential widened to an all-time high of 1.5 as investors crowded into senior exposure, with STRD trading as low as $65. The spread has since normalized to around 1.3.