The New Hampshire Business Finance Authority is set to issue $100 million in bitcoin-backed bonds, with Moody’s Investors Service assigning the deal a provisional “Ba2” rating.
What the rating means
The Ba2 rating falls in Moody’s speculative-grade category, sitting two notches below the lowest investment-grade level.
According to Moody’s guidance, such a rating indicates the obligations could be speculative and subject to substantial risk.
Moody’s said it considered all relevant risks, particularly those tied to the transaction’s collateral, structure, and operational risks of various service providers.
How the bonds are structured
The bonds will be split into two classes with an initial combined balance of $100 million, though the respective balance for each class has not yet been determined.
While issued through a quasi-public state agency, the bonds are structured as “limited recourse obligations,” meaning repayment comes solely from proceeds of the bitcoin collateral — no public funds are on the hook.
BitGo will serve as custodian, holding the bitcoin collateral in segregated wallets, and will also act as liquidation agent responsible for converting bitcoin into cash to cover interest and principal payments.
Safeguards and triggers
The deal includes a standard collateral monitoring mechanism, with the loan-to-value ratio tested regularly.
Initial collateral coverage is set at 1.60x, with a mandatory redemption trigger kicking in if the LTV ratio falls to 1.40x — levels Moody’s described as consistent with the target rating.
It is not yet clear when the bonds will officially launch.
The issuance comes as U.S. public entities continue exploring crypto adoption, with the Labor Department recently proposing a rule that would allow cryptocurrencies to be included in 401(k) retirement plans following a Trump executive order.
