Strategy’s S&P B− Upgrade Path: More Cash, Less Net Debt, Still S&P’s Call

In October 2025, S&P Global Ratings assigned Strategy a B− / Stable issuer credit rating. Its upside scenario centered on three things: maintaining U.S. dollar liquidity meaningfully above the next 12 months of preferred dividends and interest, reducing convertible debt, and retaining access to capital markets even under bitcoin stress. [Rating announcement]

Nearly a year later, Strategy is explicitly showing investors how its balance sheet has moved against those conditions.

The numbers have changed substantially. Dollar liquidity has gone from tens of millions to billions. Convertible principal is lower. And Strategy continued raising capital throughout a difficult bitcoin market.

None of that guarantees an upgrade. Credit ratings remain S&P’s decision.

But the capital structure S&P originally evaluated looks materially different today.

An S&P credit rating and S&P 500 inclusion are separate decisions. A stronger credit profile could make Strategy’s capital structure look more durable and institutional, which would be directionally positive if S&P 500 inclusion is ever considered. But a credit upgrade would not itself qualify Strategy for the index or guarantee inclusion.

What S&P wanted to see

Strategy’s September 2026 presentation summarizes the rating upside case around three conditions:

1. USD liquidity meaningfully higher than 12 months of preferred dividends and interest
2. Less convertible debt
3. Continued access to capital during bitcoin stress

The interesting part is that all three can now be tested against Strategy’s subsequent disclosures rather than relying solely on the presentation.

1. Dollar liquidity went from $54M to $6.54B

This is the largest change.

At September 30, 2025, Strategy had roughly $54 million of cash-like dollar liquidity.

By September 7, 2026, Strategy reported:

USD Reserve: $5.10B
USD Cash: $1.44B
Total: $6.54B

Those figures are now directly confirmed in Strategy’s September 8 Form 8-K. [September 8 Form 8-K]

The distinction matters.

Strategy describes the USD Reserve as liquidity intended to support preferred-stock dividends and interest on outstanding indebtedness. USD Cash is more flexible: it can be used for bitcoin purchases, reserve additions, capital management and other Bitcoin Treasury Company purposes. [September 8 Form 8-K]

Strategy’s presentation frames that liquidity as roughly four years of coverage for preferred dividends and interest. The exact coverage period changes as the preferred stack, dividend rates and debt load change.

The important part is the scale.

Strategy no longer has the thin dollar-liquidity buffer it carried when S&P first rated the company.

For common shareholders, this matters because preferred dividends represent a recurring cash claim on the capital structure ahead of common shareholders. The USD Reserve is specifically designed to support those payments and debt interest without forcing Strategy to sell bitcoin at an unfavorable time.

2. Convertible debt is lower — and narrow “net debt” is nearly gone

Convertible principal has also moved meaningfully.

Strategy reported that its May 2026 repurchase of the 2029 convertible notes reduced aggregate convertible principal from approximately $8.21B to $6.71B. [May 26 debt repurchase update]

Combine that with $6.54B of dollar liquidity and you get the striking number in Strategy’s presentation:

Net debt ≈ $174M

Here, “net debt” means:

convertible principal − dollar liquidity

That is a deliberately narrow definition.

The number is useful, but only with the footnote attached.

Near-zero net convertible debt does not mean Strategy has almost no claims ahead of common equity. Preferred stock remains outside this calculation.

That distinction is especially important now that Strategy's capital structure includes STRK, STRF, STRD, STRC and STRE.

So the actual story is:

converts down + dollar liquidity up = narrow net debt close to zero.

The preferred stack remains very real.

3. Strategy continued raising capital through bitcoin stress

This was the hardest of S&P’s conditions to measure because “access to capital” is partly qualitative.

But the 2026 record is increasingly difficult to dismiss.

Strategy reported $17.06B of capital raised through its ATM programs by July 26, 2026. [Second-quarter results]

The weekly filings after that show another roughly $3.9B of proceeds through August 30, including approximately $2.01B in the week ending August 23 alone. [August 24 Form 8-K] [August 31 Form 8-K]

That filing-level cross-check lands very close to the approximately $20.92B shown in Strategy’s January-through-August presentation chart.

The reconciliation is not perfectly apples-to-apples — Strategy’s weekly 8-Ks report net proceeds after sales commissions while some YTD disclosures use broader capital-raised figures — but the presentation total is directionally and numerically consistent with the filings.

More important than the exact decimal is the pattern.

Strategy continued accessing the equity markets while bitcoin weakened, using both common and preferred capital across 2026.

That is much closer to the behavior S&P wanted to observe than a company whose financing window disappears as soon as bitcoin falls.

Any rating upgrade remains S&P’s call.

Why preferred dividends sit at the center of the story

The rating question is not simply how much bitcoin Strategy owns.

It is whether the capital structure can meet its dollar claims without being forced to sell bitcoin — and whether Strategy can continue funding itself when market conditions deteriorate.

That is why the USD Reserve matters.

It is also why STRC repurchases matter.

During the week ending September 7, Strategy repurchased approximately 1.81 million STRC shares for $176.3M, and the company explicitly disclosed that those repurchases were funded from USD Cash. The USD Reserve itself remained at $5.10B. [September 8 Form 8-K]

Reducing STRC outstanding below stated amount can reduce future preferred dividend requirements while Strategy attempts to maintain STRC around its $100 stated amount.

Strategy's stated policy is also clear that the dedicated USD Reserve is not ordinarily available for STRC repurchases; those purchases are funded from other capital sources. [STRC repurchase policy]

Liquidity, preferreds and converts therefore have to be viewed as one system.

The upgrade case is not:

“Strategy owns more bitcoin.”

It is closer to:

“Can this capital structure fund its cash requirements without forced bitcoin sales, while continuing to access financing when bitcoin is weak?”

What an upgrade would — and wouldn’t — change for common shareholders

A higher credit rating would be a positive development for Strategy’s capital structure.

It could improve the perceived credit quality of Strategy's obligations, support the preferred securities and potentially make parts of the financing stack more efficient.

But an upgrade would not automatically:

• increase bitcoin holdings
• increase BTC/share
• reduce the common share count
• guarantee permanently cheaper capital
• determine S&P 500 inclusion

And this is where the rating story reconnects to BTCperShare.

Credit improvement and BTC/share accretion are only connected when you track how the improvement was funded.

Strategy built its liquidity position largely through capital markets.

Common ATM issuance can strengthen the balance sheet while increasing the common-share denominator. Preferred issuance can provide capital without immediately increasing basic common shares, but creates a recurring preferred dividend claim.

Either transaction can improve credit metrics.

Neither automatically improves BTC/share.

The shareholder questions therefore remain:

1. How large is the preferred dividend load the USD Reserve must support?
2. How much common dilution or preferred amplification accompanied the capital raised?
3. Did bitcoin per share actually increase through the same period?

That is the distinction we track on the Strategy securities page, alongside the individual preferred securities.

What we're watching next

The biggest question is now simple: does S&P agree that Strategy has moved far enough?

Dollar liquidity is dramatically higher than it was when Strategy was initially rated. Convertible principal is lower. And Strategy has demonstrated continued access to equity financing through a significant bitcoin drawdown.

But credit improvement does not eliminate the underlying dependence on capital markets.

Strategy still carries a large preferred stack. The dividend burden changes as securities are issued or repurchased. And a prolonged closing of the capital markets would test the structure in a way that the 2026 drawdown has not yet fully done.

For BTCperShare, the next things to watch are the size and coverage of the USD Reserve, further convertible reductions, STRC repurchases and issuance, and — ultimately — whether strengthening the credit profile continues to create value per common share.

More cash. Less convertible debt. Continued capital access.

The upgrade path is considerably clearer than it was in October 2025.

The upgrade itself remains S&P’s decision.