[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Josh Man [@JoshMandell6](/creator/twitter/JoshMandell6) on x 140.9K followers Created: 2025-07-26 03:29:15 UTC When a bond issuer doesn't have the right to force bondholders to sell their bonds back to the company (known as a "call option"), they make a tender offer, or they can purchase US Treasuries perfectly offsetting the liabilities of outstanding bonds and set them aside in a legally binding contract. The latter is called defeasance. The reason why issuing bonds does not create senior equity participation is that the bonds cannot be bid up to stop a takeover by common equity holders. No matter how artificially depressed they believe the company's assets to be, they are only able to claim the Present Value of all future coupons and principal payment at a discount rate no lower than zero. This puts a cap on bond liabilities. If MSTR were borrowing via bond issuance at XX% for 30yrs, the highest price the bond could trade at zirp would be (10 x 30) + XXX = $XXX Mr Saylor describes the Senior Perpetual Preferred Stock offering as a bond where you never have to pay back the principal. As a holder, I think of it as a SENIOR equity participation (and liability of the corp) with no cap on its value as long as it cannot be retired at a limited face value. XXXXXX engagements  [Post Link](https://x.com/JoshMandell6/status/1948948704611734002)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
Josh Man @JoshMandell6 on x 140.9K followers
Created: 2025-07-26 03:29:15 UTC
When a bond issuer doesn't have the right to force bondholders to sell their bonds back to the company (known as a "call option"), they make a tender offer, or they can purchase US Treasuries perfectly offsetting the liabilities of outstanding bonds and set them aside in a legally binding contract. The latter is called defeasance.
The reason why issuing bonds does not create senior equity participation is that the bonds cannot be bid up to stop a takeover by common equity holders. No matter how artificially depressed they believe the company's assets to be, they are only able to claim the Present Value of all future coupons and principal payment at a discount rate no lower than zero. This puts a cap on bond liabilities. If MSTR were borrowing via bond issuance at XX% for 30yrs, the highest price the bond could trade at zirp would be (10 x 30) + XXX = $XXX
Mr Saylor describes the Senior Perpetual Preferred Stock offering as a bond where you never have to pay back the principal. As a holder, I think of it as a SENIOR equity participation (and liability of the corp) with no cap on its value as long as it cannot be retired at a limited face value.
XXXXXX engagements
