S&P Global assigns a 「B-」 Credit Rating to the Strategy, categorizing it as Junk Bond status with a stable outlook.
BlockBeats News, October 28th, Standard & Poor's Global Ratings has assigned the largest Bitcoin treasury company, Strategy, a credit rating of 「B-」, categorizing it as speculative, non-investment grade (commonly referred to as 「junk bonds」) — but at the same time noting that the outlook for this Bitcoin treasury company remains stable.
Standard & Poor's stated in a report released on Monday: 「We believe that Strategy's high concentration of Bitcoin, its single-business structure, weak risk-adjusted capital strength, and inadequate U.S. dollar liquidity are all weaknesses in its credit profile.」
It is reported that Strategy has accumulated a reserve of 640,808 bitcoins through equity and debt financing. Standard & Poor's pointed out that the stable rating outlook assumes that the company will prudently manage the convertible bond maturity risk and maintain preferred stock dividend payments, which may require further debt issuance to achieve.
Standard & Poor's Global also emphasized that Strategy faces 「inherent currency mismatch risk」 — all of its debt is denominated in U.S. dollars, while most of the U.S. dollar reserves are used to support the company's software business, which is currently roughly in a breakeven position in terms of revenue and cash flow.
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