I'm not arguing that these shares are a tremendous risk to whoever is purchasing - the market could very easily knock it down to $15 or $20/share right off the bat and peg the dividend rate at something more realistic for the risk.
However, you are incorrect in your statement that this is debt. Preferred shares are not debt - it is equity and dilutes shareholders. Preferred holders are not creditors and should the company file for bankruptcy, preferred holders have no recourse as bondholders do. The shares have no maturity and no obligation to be repurchased (as they are perpetual). The dividends are cumulative, and obviously depend on the company having cash flow sufficient to pay the dividend - and at this time it would appear that they don't even have the means to do that. Now, if they miss dividend payments, since it is cumulative, they would begin to rack up additional liabilities - but again, this is not debt as bonds are.
In any case, based on the previous shelf registration, this is really no surprise.
"Preferred shares are not debt - it is equity and dilutes shareholders."
The way this has been set up, these preferreds are closer to a bond than anything else. And -in general- preferred shares are not equity as they do not have voting rights and are not part of shareholders' equity. Preferreds are quasi-debt that sometimes are closer to equity (like when non-cumulative dividends or convertible) and sometimes are closer to a bond like in this case. There is no dilution here. This deal puts equity one or two notches below. And the reason the company offers this, is a statement on how they feel about the common share. They are not giving it much value or making it any more attractive.