Bitcoin enters the public bond market as Moody’s gives a first-of-its-kind crypto deal a rating

A New Hampshire state authority is set to issue a first-of-its-kind bitcoin-backed bond with a Ba2 rating, marking an early test of how crypto can function as collateral inside traditional public finance markets.

What to know:

• The New Hampshire Business Finance Authority plans to issue what appears to be the first rated bitcoin-backed bond, provisionally graded Ba2 by Moody’s, signaling a new intersection of crypto and public finance.
• The bonds are backed by bitcoin held in custody by BitGo.
• The securities are limited-recourse and do not put New Hampshire’s public funds at risk, underscoring that the state is acting as a conduit issuer as rating agencies refine methods for evaluating crypto-backed debt.

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 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 backed by bitcoin BTC$68,157.23 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 cash flow from a business. Bondholders are repaid through the liquidation of BTC held in custody by BitGo, which will be sold if needed to meet 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 transaction's collateral, structure and operation,” including bitcoin’s volatility. 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 at risk. “No public funds of the State of New Hampshire… may be used to pay amounts under the Rated Bonds,” Moody’s said.

That distinction matters. While the deal uses a state authority, it does not carry state credit backing. Instead, it resembles conduit or project finance, where the issuer serves as a pass-through.

Still, the structure places bitcoin into 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 to assess crypto-backed instruments.

The deal arrives as institutions continue to test ways to use bitcoin beyond trading or treasury holdings. The Labor Department on Monday proposed a rule following an executive order from President Donald Trump that directed regulators to expand access to digital assets in retirement portfolios, marking another step in that direction.

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