Strategy launches "Digital Credit Capital Framework", establishes BTC realization plan and two $1 billion repurchase programs

BlockBeats News, June 29, according to Strategy's 8-K filing with the U.S. SEC, the company announced the launch of a "Digital Credit Capital Framework," which includes five core elements: a USD Reserve Policy, adjustments to the STRC dividend policy, a preferred stock buyback program, a common stock buyback program, and a BTC liquidation plan. Under the USD Reserve Policy, the reserve can only be used to pay dividends on preferred stock and interest on debt, and management must maintain a reserve size sufficient to cover expected dividend and interest payments for at least the next 12 months.

As of June 28, the USD Reserve balance was $2.55 billion. Regarding STRC dividends, the company will dynamically assess the dividend rate on a monthly basis, taking into account factors such as trading price, market yield, credit spreads, and Bitcoin price volatility, and will not increase dividends solely because the STRC trading price is below par value. The company also announced an increase in the annualized dividend rate for STRC from its previous level to 12.00%, effective July 1. Regarding the buyback programs, the company has established two separate $1 billion buyback authorizations, one for the repurchase of preferred stocks including STRC, STRF, STRD, and STRK, and the other for Class A common stock, with STRC being the primary target of the preferred stock buyback program. Neither buyback program will use USD Reserve funds. Additionally, the company's board of directors has authorized a BTC liquidation plan, allowing the company to raise up to $1.25 billion through the sale of Bitcoin, which can be used to supplement the USD Reserve, pay dividends on preferred stock and interest expenses, or provide funding for the aforementioned buyback programs.