Pari passu

Pari passu ("with equal step") means two classes of securities have equal priority. If there is not enough to pay both in full, they share pro rata according to the size of their claims. A certificate of designations usually calls such securities "parity stock".

Pari passu vs senior and junior

Every preferred stock certificate sorts the issuer's other equity into three groups:

• Senior stock, which is paid first
• Parity stock, which shares equally (pari passu)
• Junior stock, which is paid after

The classification applies separately to dividends and to liquidation, although in digital credit the two usually match.

How it applies to Strategy

A common assumption is that STRF and STRC rank equally. The filings say otherwise. The STRC certificate of designations ranks STRC junior to STRF and senior to STRK and STRD (8-K, 29 July 2025). STRE's prospectus supplement treats STRF and STRC as senior and STRK and STRD as junior (424B5, 7 November 2025). On 21DC's reading of these filings as of 22 October 2026, Strategy's five preferred series form a strict order with no two series pari passu. See seniority.

Certificates can still allow future series to be issued as parity stock, sometimes only with holder consent. A new series could therefore rank pari passu with an existing one.

Why it matters

When series rank pari passu, a shortfall is shared. When one ranks ahead of another, the junior series absorbs the shortfall first. Coverage measures such as Strategy's coverage bridge include parity claims together with the instrument being measured.

What to check in the filing

• The "Ranking" section: which series are named as parity stock
• Conditions for issuing new parity or senior stock
• Whether dividend and liquidation ranking differ