The New Hampshire Business Finance Authority is set to issue what appears to be the first rated bitcoin-backed bond of its kind, marking a step toward integrating the cryptocurrency into traditional public finance.
The bonds received a provisional Ba2 rating from Moody’s Ratings, two notches below investment grade. They will be issued through the Business Finance Authority of the State of New Hampshire and are collateralized by bitcoins 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 relies on bitcoin rather than a company’s cash flow. Bondholders are repaid through the liquidation of BTC held in custody by BitGo, which will be sold if necessary to cover 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 liquidation windows to model potential downside scenarios.
The bonds are limited recourse, meaning no public funds are put at risk. “No public funds of the State of New Hampshire… may be used to pay any amounts relating to the rated obligations,†Moody’s said.
This distinction is important. Although the agreement uses a state authority, it does not benefit from a state credit guarantee. On the other hand, it resembles conduit or project financing, where the issuer acts as an intermediary.
Yet this structure places bitcoin in a part of the financial system where it has rarely featured: rated debt issued through public channels.
The Ba2 rating classifies bonds as speculative, but also signals that rating agencies are developing frameworks to evaluate cryptocurrency-backed instruments.
The deal comes as institutions continue to explore ways to use bitcoin beyond trading or cash holdings. The Labor Department announced Monday that it proposed a rule following an executive order from President Donald Trump directing regulators to expand access to digital assets in retirement portfolios, marking another step in that direction.
