Digital Credit explained

Digital Credit is the category of fixed-income instruments that a Treasury Company issues and backs with its Treasury Assets. Each security in this category is a Credit Instrument.

Most Credit Instruments today are perpetual preferred stock. A perpetual preferred share pays a dividend at a stated rate and has no maturity date. Some Credit Instruments are convertible notes. A convertible note pays interest, has a maturity date, and the holder can change it into common stock.

"Backs" does not mean collateral. A Credit Instrument holder has no legal claim on a specific unit of a Treasury Asset. The holder has a claim on the Company, in the order of the Capital Structure.

A Treasury Company sells Credit Instruments to get cash. It uses the cash to buy more of its Treasury Asset. It pays the dividends from cash, from a USD reserve, or from the sale of more stock.

The Company gets more Treasury Assets without the sale of more common stock. When the Treasury Asset increases in value faster than the dividend rate, the common shareholders get the difference. When it decreases, the common shareholders get the loss first.

For example, Strategy says that it targets annual Digital Credit sales of 10% to 20% of its BTC Reserve when market conditions are good. Source: Strategy, Free Writing Prospectus (MSTR investor briefing) · 2026-08-24.

The Notional is the face or liquidation value of one unit of a Credit Instrument, for example $100 for each preferred share. It is in the currency of the Credit Instrument, for example €100 for STRE. This site converts a Notional in EUR, JPY, or BRL to USD with the exchange rate of the Market Data Snapshot.

The dividend rate is a percentage of the Notional. A 10% rate on a $100 Notional is $10 for each year.

The Seniority is the order in which a Credit Instrument is paid compared to the others in the same Capital Structure. 1 is paid first. Credit Instruments with the same Seniority are paid at the same time (pari passu). A Seniority order has no gaps.

Debt is usually senior to preferred stock. Each preferred stock has a Seniority that its prospectus states. The Capital Structure of a Company is all its debt and Credit Instruments, ordered by Seniority. Each Credit Instrument page shows the Capital Structure of its Company.

A Credit Instrument trades on an exchange. Its price can be higher or lower than its Notional. The price changes the income for a new buyer.

Effective yield = annual dividend ÷ price

Premium or discount = price ÷ Notional − 1

Spread = effective yield − US 10Y Treasury yield

For example, a share with a $100 Notional and a 10% rate pays $10 each year. At a price of $80, the effective yield is 12.5% and the discount to Notional is −20%. At a price of $110, the effective yield is 9.1% and the premium is +10%.

The spread shows how much more income the Credit Instrument gives than a US Treasury bond. A higher spread usually shows that the market sees more risk.

The Asset Rating shows how many times the Treasury Assets of a Company cover one Credit Instrument and all instruments that are paid before it or at the same time. This site names it for the asset, for example "BTC Rating" or "ETH Rating".

Asset Rating = USD value of the Treasury Assets ÷ (Notional of this Credit Instrument + Notional of all instruments senior to it or at the same Seniority)

For example, a Company holds $50B of BTC. Its debt (Seniority 1) has a Notional of $5B. Its preferred stock A (Seniority 2) has a Notional of $5B. The BTC Rating of the debt is 50 ÷ 5 = 10x. The BTC Rating of preferred stock A is 50 ÷ (5 + 5) = 5x.

treasury-company.com calculates the Asset Rating. It is not an agency credit rating. It is not the official number of the Company.

The Amplification shows how much the Treasury Assets of a Company are more than its net reserve. The net reserve is what stays for the common shareholders after the Company pays all its debt and Credit Instruments.

Amplification = USD value of the Treasury Assets ÷ net reserve

Net reserve = USD value of the Treasury Assets − Notional of the Capital Structure + USD Assets

The USD Assets are the USD that the Company reports that it keeps next to its Treasury Assets, for example to pay dividends and interest. Each value has a date and a Source. When a Company reports no USD Assets, the Amplification shows "—".

An Amplification of 1.3x tells that a 10% change in the Treasury Asset price changes the net reserve by approximately 13%. A higher Amplification makes both gains and losses larger.

treasury-company.com calculates the Amplification. It is not the official number of the Company.

• Treasury Asset price. When the price of the Treasury Asset decreases, the Asset Rating decreases and the Amplification increases. One asset can lose a large part of its value in a short time.
• No collateral. The Treasury Assets are not pledged to the holders of a Credit Instrument. In a liquidation, the holders are paid in the order of Seniority, after the senior instruments.
• Dividends are not guaranteed. The board of the Company declares each dividend. A non-cumulative dividend that is not paid is lost. A cumulative dividend that is not paid accumulates, but the holder can wait a long time.
• No maturity. A perpetual preferred share has no repayment date. A holder gets money back only from a sale at the market price, or when the Company redeems the share.
• Rate changes. Some Credit Instruments have a variable rate that the Company can change. The terms are in each prospectus.
• Access to capital markets. A Company can sell stock to pay dividends. If the market does not buy its stock or Credit Instruments, the Company possibly must sell Treasury Assets.
• Metric limits. The Asset Rating does not include cross-default, where a default on one debt makes other debt due sooner. The Asset Rating and the Amplification use the Treasury Asset price at one date.

Strategy publishes its own BTC Rating, Amplification, and mNAV. This site uses one formula for all Companies, so some values are different from Strategy's values.

• BTC Rating, pari passu instruments. Strategy adds an instrument at the same Seniority only when it matures, or the holder can make the Company repurchase it, before the rated instrument. This site adds all instruments at the same Seniority. The Asset Rating on this site can be lower.
• BTC Rating, numerator. Strategy uses its BTC Reserve (in December 2025, "Bitcoin NAV"). This site uses the USD value of all Treasury Assets. For a Company that holds only BTC, the two are equal.
• Amplification, net reserve. Like Strategy, this site adds the USD Assets: Strategy's "USD Reserve" + "USD Cash" from a weekly 8-K. The Company page shows the date and the 8-K of the value. Strategy subtracts the Notional of its out-of-the-money convertible notes and other debt, and of its preferred stock without in-the-money STRK shares. This site subtracts the Notional of the full Capital Structure. The Amplification on this site can be very different from Strategy's value.
• mNAV. Since 2026-07-23, Strategy's mNAV is the stock price ÷ Net BTC per share. On this site, mNAV is Enterprise Value ÷ the USD value of the Treasury Assets. The two are not comparable.
• Prices. Strategy uses the BTC price on Coinbase. This site uses the CoinGecko price. Strategy converts a Notional in EUR with the exchange rate on the last Friday at 12:30 PM New York time. This site uses the FRED daily rate.

Each Credit Instrument has a page with its data and its Sources.

• STRF — 10.00% Series A Perpetual Strife Preferred Stock (Strategy)
• STRC — Variable Rate Series A Perpetual Stretch Preferred Stock (Strategy)
• STRE — 10.00% Series A Perpetual Stream Preferred Stock (Strategy)
• STRK — 8.00% Series A Perpetual Strike Preferred Stock (Strategy)
• STRD — 10.00% Series A Perpetual Stride Preferred Stock (Strategy)
• SATA — Variable Rate Series A Perpetual Preferred Stock (Strive)

• Strategy, Form 8-K, Exhibit 99.2 · 2025-12-01: definition of BTC Rating.
• Strategy, Free Writing Prospectus (MSTR investor briefing) · 2026-08-24: definitions of BTC Rating, BTC Reserve, USD Assets, Net Reserve, Amplification, and mNAV.
• Prospectus of each Credit Instrument: on its Credit Instrument page.
• All formulas and data sources of this site: Methodology.