Strategy Has a New Argument Against Its Junk Rating

Strategy, the largest publicly traded Bitcoin treasury company, is building a formal case to escape its junk credit rating from S&P Global, pointing to a dramatic improvement in its balance sheet over the past 11 months.

Chaitanya Jain, Strategy's head of investor relations, said on September 10 that the company has strengthened its financial position across the three areas S&P Global Ratings previously identified as potential paths to an upgrade: dollar liquidity, convertible debt, and capital-market access during Bitcoin stress.

A Balance Sheet Transformed

The numbers Jain cited are striking. Dollar liquidity reached $6.54 billion by September 7, up sharply from just $54 million roughly 11 months earlier. The company also reduced its convertible debt load by approximately $1.5 billion through repurchases, pushing net debt from $8.16 billion down to around $174 million.

The improvement in liquidity is part of a broader capital-building effort. Jain said the company raised $21 billion across common and preferred equity from January through August, securing capital in every month of the period. Notably, during this period, $BTC price fell more than 30% and dropped below $60,000, yet investor demand held firm, which directly addresses one of S&P's core concerns about the durability of Strategy's funding access during market downturns.

S&P affirmed Strategy's B- issuer credit rating with a stable outlook in December 2025, after initially assigning the grade in October. The rating sits six notches below BBB-, the lowest rung of investment grade. When S&P originally assigned the rating, the agency said Strategy's balance sheet is overwhelmingly tied to Bitcoin and that its low dollar liquidity and negative risk-adjusted capital outweigh strong access to capital markets and prudent debt management.

S&P Has Yet to Act

S&P has taken no fresh rating action since the latest balance-sheet changes, and Jain was careful not to predict one. The timing is becoming more pressing: S&P said in October 2025 that an upgrade was unlikely within 12 months, a window that runs through late October 2026.

The key risk that remains is structural. Strategy's assets are almost entirely held in $BTC, while its debt and dividend obligations are denominated in U.S. dollars. That currency mismatch means the company's financial position is still closely tied to Bitcoin's price. Any significant decline in $BTC could quickly erode the liquidity cushion Strategy has spent much of 2026 building.

For now, the company is letting the numbers make its argument. Whether S&P agrees before the 12-month window closes remains to be seen.

Sources:
CryptoSlate: Strategy makes its case to escape S&P's B- junk credit rating
CoinDesk: Strategy's net leverage falls to near zero as dollar liquidity reaches $6.69 billion
The Block: S&P assigns Strategy a junk-bond B-minus rating