The New Hampshire Commerce and Finance Authority will issue what appears to be a first-of-its-kind rated Bitcoin-backed bond, marking a step in the direction of integrating cryptocurrencies into traditional public finance.
The bond has an interim Ba2 rating from Moody’s Ratings, two notches below investment grade. They will be issued through the New Hampshire Commerce and Finance Authority and will be backed by Bitcoin is held as collateral, according to the release.
“The rated bonds will be collateralized by loans … backed by Bitcoin, a digital currency,” Moody’s said in the report.
The structure relies on Bitcoin rather than the business’s cash flow. Bond holders are repaid by liquidating BTC hosted by BitGo, which will be sold if necessary to pay interest and principal. The deal includes safeguards commonly found in structured credit, including 1.6x overcollateralization, and triggers for forced liquidation if the loan-to-value ratio deteriorates.
Moody’s said its ratings reflect “risks associated with the transaction’s collateral, structure and operations,” including Bitcoin’s volatility. The agency used a 72% prepayment rate and a shorter liquidation window to model potential downside scenarios.
The bonds have limited recourse, meaning public funds are not at risk. “Public funds of the State of New Hampshire … may not be used to pay amounts under the rated bonds,” Moody’s said.
This distinction is important. While the deal used state authorities, it was not backed by state credit. Rather, it is similar to conduit or project financing, with the issuer acting as a pass-through.
Still, the structure incorporates Bitcoin into a rarely seen part of the financial system: rated debt issued through public channels.
The Ba2 rating puts the bonds into speculative-grade territory, but also signals that credit agencies are developing a framework for evaluating cryptocurrency-backed instruments.
The deal comes as institutions continue to test ways to use Bitcoin beyond trading or holding Treasury securities. The U.S. Department of Labor on Monday proposed a rule following President Donald Trump’s executive order directing regulators to expand the use of digital assets in retirement portfolios, marking another step in that direction.