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<p>Moody’s Investors Service has assigned a provisional rating to New Hampshire’s Bitcoin-backed U.S. municipal bond.</p>
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   <li>Moody’s has assigned a provisional Ba2 rating to New Hampshire’s Bitcoin-backed municipal bond, placing it in speculative grade due to credit risk.</li>
   <li>The rating remains subject to final legal documentation, marking an important step before pricing and potential market entry.</li>
   <li>The $100 million bond structure relies on overcollateralized Bitcoin, with borrowers posting around 160% collateral and custody handled by BitGo.</li>
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<p>Per a Tuesday <a href="https://ratings.moodys.com/ratings-news/462420" rel="noopener noreferrer nofollow">statement</a>, the agency has given the bond a Ba2 rating, which falls within the “speculative grade” category and reflects substantial credit risk.</p>
<p>However, it must be noted that the rating is provisional, which typically means Moody’s has reviewed the necessary documents to arrive at its assessment, but is still awaiting final legal documentation before issuing a final judgment.</p>
<p>You might also like: <a href="https://crypto.news/fhe-and-the-quantum-threat-why-homomorphic-encryption-is-built-for-the-post-quantum-era/" rel="noopener noreferrer nofollow"> FHE and the Quantum Threat: Why homomorphic encryption is built for the Post-Quantum era </a></p>
<p>Rating assessments like these offer institutions a way to assess credit risk and guide decision-making, with some investors restricted to investment-grade assets. For the proposed bond, this marks a key step toward potential institutional participation.</p>
<p>As for the next step, the product would need to be priced before entering the market.</p>
<h2 class="wp-block-heading" id="a-first-of-its-kind">A first-of-its-kind</h2>
<p>The <a href="https://crypto.news/new-hampshire-launches-first-bitcoin-backed-municipal-bond-in-the-united-states/" rel="noopener noreferrer nofollow">Bitcoin-backed bond was approved</a> by New Hampshire’s business financing agency, the New Hampshire Business Finance Authority, in November last year to establish what it described as a first-of-its-kind $100 million Bitcoin-backed conduit bond.</p>
<p>Typically, municipal bonds are backed by government credit or project revenue streams, but in this case, the structure relies on over-collateralized Bitcoin.</p>
<p>Per the proposed structure, borrowers would post around 160% of the bond’s value in Bitcoin, with BitGo set to serve as the third-party custodian, alongside a state entity overseeing the bond without taking on repayment risk.</p>
<p>Fees from the program are expected to support the Bitcoin Economic Development Fund, allowing the state to reinvest in business growth and financial innovation.</p>
<p>The bond does not have an official launch date, but its rating has been influenced by Bitcoin’s recent volatility, according to Moody’s.</p>
<p>The Ba2 rating places the bond just below investment-grade status and means it is considered a speculative investment.</p>
<p>Read more: <a href="https://crypto.news/tesseract-launches-mica-compliant-yield-vaults-for-institutions/" rel="noopener noreferrer nofollow"> Tesseract launches miCA-compliant yield vaults for institutions </a></p>

New Hampshire Bitcoin-backed bond receives Ba2 rating from Moody’s

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