Moody’s Investors Service has assigned a provisional Ba2 rating to New Hampshire’s proposed Bitcoin-backed municipal bond, moving the offering a step closer to issuance. The Ba2 designation is non-investment grade and reflects substantial credit risk tied to the collateral.
Moody’s said the provisional rating follows a full review of available materials but remains conditional on certain final legal documents before it can be converted to a final rating. The next practical milestone would be pricing the bonds; no launch date has been announced.
The rating will help investors and institutions evaluate credit risk and determine whether the bonds meet mandates that restrict holdings to investment-grade securities. Moody’s identified Bitcoin’s price volatility and liquidity considerations as the main factors behind the Ba2 outcome. Its analysis used a 72.06% advance rate and assumed a two-day exposure period—parameters that, given Bitcoin’s historical trading behavior, correspond to a Ba2 assessment for Bitcoin collateral.
While Bitcoin’s volatility has moderated from earlier peaks, it remains materially higher than that of assets like the Nasdaq-100 and gold, S&P Global observed in a recent report. Crypto-specific, idiosyncratic factors continue to influence price swings, which is pertinent for lenders and bond investors relying on digital-asset collateral.
The New Hampshire Business Finance Authority (BFA) approved the state’s municipal Bitcoin-backed bond program in November, positioning it as the first state-issued bond reportedly backed by Bitcoin. The initial plan contemplated an issuance of up to $100 million, structured to allow companies to borrow against overcollateralized Bitcoin holdings.
BitGo Trust Company Inc. has been named custodian for the Bitcoin collateral. The financing structure was developed by Wave Digital Assets alongside bond specialist Rosemawr Management. According to the BFA, fees generated by the program are intended to seed a Bitcoin Economic Development Fund to support business growth and financial innovation in New Hampshire.
The provisional Ba2 rating highlights the novel risks inherent in a municipal product secured by Bitcoin—chiefly price volatility and liquidity dynamics. Those factors will be central to investor and issuer decisions as the project moves toward pricing and a potential market debut.