The New Hampshire Business Finance Authority will issue the first rated bitcoin-backed bond, receiving a provisional Ba2 rating from Moody’s.
The Business Finance Authority of the State of New Hampshire is set to issue what appears to be the first bitcoin-backed bond to receive an official credit rating. Moody’s Ratings has assigned a provisional Ba2 rating to the securities, placing them two notches below investment grade, in the speculative category.
The bond structure provides that the securities are backed by bitcoin held in custody by BitGo, which may be liquidated if necessary to meet interest and principal payments. This is not a bond supported by a company’s cash flows, but by the direct liquidation of BTC collateral. As specified in Moody’s report, “The Rated Bonds will be collateralized by a loan… secured by Bitcoin, a digital currency”.
The transaction includes a series of protections typical of structured credit: 1.6x overcollateralization and automatic liquidation mechanisms triggered by deterioration of the loan-to-value ratio. Moody’s applied an advance rate of 72% and reduced liquidation windows to model downside scenarios, acknowledging that the rating reflects risks tied to bitcoin’s volatility and the operational structure of the transaction.
The bonds carry limited recourse, meaning no public funds of the State of New Hampshire are at risk. As clarified by Moody’s, “No public funds of the State of New Hampshire… may be used to pay amounts due on the Rated Bonds”. The state authority thus acts as a conduit issuer — a simple pass-through intermediary — with no state credit serving as a guarantee.
