Strategy announced a new Digital Credit Capital Framework on June 29th that outlines changes to its preferred securities strategy, liquidity policy, Bitcoin monetization plan, and repurchase programs.

The framework includes a Board-approved USD Reserve policy, a revised STRC dividend policy, repurchase programs for Digital Credit securities and MSTR common stock, and a BTC monetization program.

The measures cover liquidity management, preferred stock dividend obligations, Bitcoin monetization, and long-term Bitcoin exposure.

Strategy stated its USD Reserve was approximately $2.55 billion as of June 28th, including expected proceeds from shares sold through its at-the-market offering program that had not yet settled.

The reserve may only be used to pay preferred stock dividends and interest on outstanding debt unless the Board authorizes another use.

Based on expected annual preferred stock dividend payments and interest expense of approximately $1.76 billion, Strategy said the reserve represents around 17.4 months of coverage. 

The company also adopted a policy to maintain at least 12 months of coverage in the USD Reserve, with any reduction below that level requiring Board authorization.

Strategy also said it will increase the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock, STRC, to 12.00% for semi-monthly periods with record dates on or after July 1st, 2026. 

The change does not affect previously declared but unpaid STRC dividends.

The company’s objective is for STRC to trade over time within a range of approximately $99 to $100, near its $100 stated amount. 

Strategy said it will review the STRC dividend rate monthly based on factors including STRC trading levels, market yields, credit spreads, Bitcoin price and volatility, USD Reserve coverage, capital market conditions, and its overall capital structure.

Strategy also established a repurchase program for up to $1 billion of its outstanding Digital Credit securities, including STRC, STRF, STRD, and STRK. 

STRC is expected to be the initial priority if management determines that repurchases would be accretive and would affect the company’s capital structure.

In addition, Strategy announced a separate repurchase program for up to $1 billion of its class A common stock. 

Buybacks may occur through open-market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions, or other legally permitted methods.

Neither repurchase program requires Strategy to buy any specific amount of securities. Both programs have no fixed expiration date and may be changed, suspended, or terminated at any time. Repurchases will not be funded from the USD Reserve.

Strategy’s Board also authorized a BTC Monetization Program that allows the company to sell Bitcoin for three stated purposes.

The first is to generate up to $1.25 billion for the USD Reserve. The second is to fund or replenish preferred dividend and interest payments when management determines it is more favorable than issuing common stock or using other capital markets activity.

The third is to fund repurchases of Digital Credit securities or class A common stock, including related taxes, fees, and transaction costs.

Any Bitcoin monetization outside those purposes or above the authorized amounts would require additional Board approval. 

The program has no fixed expiration date and does not require Strategy to sell any Bitcoin, fund dividend or interest payments through Bitcoin sales, or repurchase any securities.

Including the $2.55 billion USD Reserve and the $1.25 billion of authorized Bitcoin monetization capacity for reserve-building, Strategy said it has approximately $3.80 billion of total current preferred stock dividend liquidity coverage, representing about 25.9 months of current expected preferred stock dividend payments and interest expense.

Strategy also said it expects to remain disciplined in its use of common equity issuance, particularly when its common stock trades at or near 1x mNAV per share.

The company defines mNAV as the multiple of its Bitcoin Reserve, calculated by dividing enterprise value by the Bitcoin Reserve. 

Strategy noted that although the metric uses the term “NAV,” it is not equivalent to net asset value in the traditional financial context and should be viewed as a supplemental metric rather than a substitute for financial statements and SEC filings.