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 crypto into traditional public finance.
The bonds received a preliminary 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 backed by bitcoin held as security, according to a press release.
“The rated bonds will be secured by a loan … backed by Bitcoin, a digital currency,” Moody’s said in its report.
The structure relies on bitcoin rather than cash flow from a business. Bondholders are repaid through the liquidation of BTC held in escrow by BitGo, which will be sold if necessary to meet interest and principal. The deal includes safeguards common in structured credit, including 1.6x over-collateralisation and triggers that force liquidation if the loan-to-value ratio deteriorates.
Moody’s said its rating reflects “risks associated with the security, structure and operation of the transaction,” including bitcoin’s volatility. The agency used a 72% advance rate and short liquidation windows to model potential downside scenarios.
The bonds have limited recourse, which means that no public funds are at risk. “No public funds of the State of New Hampshire… may be used to pay amounts below the rated bonds,” Moody’s said.
That distinction matters. While the agreement uses a government agency, it does not have government credit support. Instead, it resembles conduit or project financing, where the issuer acts as a pass-through.
Still, the structure 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 speculative-grade territory, but also signals that credit agencies are developing frameworks for evaluating crypto-backed instruments.
The deal comes as institutions continue to test ways to use bitcoin beyond trading or treasury holdings. The Labor Department proposed a rule Monday following an executive order by President Donald Trump directing regulators to expand access to digital assets in pension portfolios, marking another step in that direction.
