Moody’s assigns a rating to the first-ever bitcoin-backed public bond offering.

New Hampshire Authority to Issue First Rated Bitcoin-Backed Bond

The New Hampshire Business Finance Authority is preparing to issue a pioneering bitcoin-backed bond, marking an early experiment in integrating cryptocurrency into traditional public finance markets.

The bonds have received a provisional Ba2 rating from Moody’s, placing them two notches below investment grade. They will be collateralized with bitcoin BTC $68,874.54 held in custody by BitGo, which will be sold if necessary to meet interest and principal payments, according to a press release.

“The Rated Bonds will be collateralized by a loan… backed by Bitcoin, a digital currency,” Moody’s noted in its report. Unlike conventional bonds that rely on cash flows from a business or government entity, repayment here depends entirely on the liquidation of BTC. The deal incorporates standard safeguards from structured finance, including 1.6x overcollateralization and automatic liquidation triggers if the loan-to-value ratio declines.

Moody’s said the Ba2 rating reflects “risks associated with the transaction’s collateral, structure and operation,” highlighting bitcoin’s well-known volatility. The agency modeled downside scenarios using a 72% advance rate and short liquidation windows.

Importantly, the bonds are limited recourse, meaning no public funds are at risk. “No public funds of the State of New Hampshire… may be used to pay amounts under the Rated Bonds,” Moody’s emphasized. The structure functions more like conduit or project finance, with the state authority acting as a pass-through issuer rather than providing a credit guarantee.

The issuance marks one of the first instances of bitcoin being integrated into rated debt issued through public channels. While speculative-grade, the Ba2 rating demonstrates that credit agencies are developing methodologies to evaluate crypto-backed instruments.

The move comes amid broader institutional exploration of bitcoin beyond trading or treasury holdings. On Monday, the Labor Department proposed a rule following a Trump-era executive order directing regulators to expand access to digital assets in retirement accounts, signaling growing acceptance of cryptocurrency in mainstream finance.

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