The New Hampshire Business Finance Authority is poised to issue what appears to be the first rated bitcoin-backed bond of its kind, marking a step toward integrating cryptocurrencies into mainstream public finance.
The bonds received a provisional Ba2 rating from Moody’s Ratings, two notches below investment grade. They will be issued through the State of New Hampshire Business Finance Authority and are backed by bitcoin held as collateral, according to a press release.
“The Rated Bonds will be collateralized by a loan… backed by Bitcoin, a digital currency,” Moody’s said in its report.
The structure is based on bitcoin rather than a business’ cash flow. Bond holders are reimbursed through the liquidation of BTC held in trust by BitGo, which will be sold as necessary to meet interest and principal payments. The deal includes safeguards common in structured credit, including 1.6x overcollateralization and triggers that force liquidation if the loan-to-value ratio deteriorates.
Moody’s said its rating reflects “risks associated with the collateral, structure and operation of the transaction,” including the volatility of bitcoin. The agency used a 72% advance rate and short settlement windows to model potential downside scenarios.
The bonds are limited liability, meaning no public funds are at risk. “No public funds of the State of New Hampshire…may be used to pay amounts related to the Rated Bonds,” Moody’s said.
This distinction is important. Although the agreement uses a state authority, it is not guaranteed by state credit. Instead, it resembles conduit or project financing, where the issuer acts as the conduit.
However, the framework places bitcoin in a part of the financial system where it has rarely appeared: rated debt issued through public channels.
The Ba2 rating places the bonds in a speculative-grade category, but also signals that rating agencies are developing frameworks for evaluating cryptocurrency-backed instruments.
The deal comes as institutions continue to experiment with ways to use bitcoin beyond trading or treasury reserves. The Department of Labor on Monday proposed a rule following an executive order from President Donald Trump that directed regulators to expand access to digital assets in retirement portfolios, marking another step in that direction.
