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Strategy sold $100M structured product to protect STRC near $100

Solstice said the senior tranche would not start absorbing losses unless STRC trades below $47.66, about 52% under its $100 par value.

Reported · Written up by our desk · Market Structure

Solstice announced a tranched structured product tied to Strategy’s Bitcoin-related STRC preferred stock, aiming to keep investors’ “senior” position from being impaired if STRC sells off. According to CryptoSlate, Solstice set a modeled senior-impairment threshold at $47.66, and said the senior tranche would not begin absorbing losses until STRC trades below that level. STRC was trading near $95.315 at the time described, implying the threshold is roughly half of the then-current price.

CryptoSlate reported that Solstice’s structure is built on a risk model tied to Strategy’s Digital Credit Capital Framework, which combines a dollar reserve policy, a revised dividend structure, and repurchase authorizations. The company said it expects to keep STRC trading between $99 and $100, and Strategy has spent about six weeks managing STRC’s price to that goal.

The outlet also said Strategy repurchased 288,930 STRC shares for about $25 million between July 20 and July 26, at an average price near $86.52. In early August, it sold $108.6 million worth of Bitcoin and used the proceeds to repurchase 1,152,020 STRC shares, on top of a $4.65 billion dollar-denominated reserve reported as of Aug. 9. Solstice described the exposure split between two tokens, SR-strcUSX and JR-strcUSX, with a $100 combined exposure translating into a 200% senior coverage ratio, and it framed the tranching as a way to deliver NAV-based returns separate from STRC’s price swings.

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