New Hampshire Issues $100 Million in Bitcoin-Backed Bonds with Moody's Speculative Rating

The New Hampshire Business Finance Authority (BFA) has announced plans to issue $100 million in Bitcoin-collateralized bonds, a first for a U.S. public authority. This move is significant as it marks the entry of cryptocurrency-backed debt into the municipal bond market.

The bonds have been assigned a Ba2 rating by Moody's Investors Service, which falls short of investment-grade thresholds and is considered speculative-grade. As a result, conventional muni buyers are largely excluded from participating in this issue, limiting the pool of potential investors to high-yield muni investors, hedge funds, and crypto-native fixed-income allocators.

The bond structure features Bitcoin as collateral, with BitGo Bank & Trust serving as custodian and liquidation agent. The arrangement has a 1.60x coverage ratio at inception, ensuring that the value of the Bitcoin collateral must be worth 1.60 times the outstanding loan balance at all times. A mandatory full redemption is triggered if this ratio falls below 1.40x.