Moody’s Ratings has assigned a provisional Ba2 rating to up to $100 million in bitcoin-backed taxable revenue bonds that are set to be issued by the Business Finance Authority of the State of New Hampshire. The transaction is tied to the Waverose Finance Project and stands out because the bonds are backed solely by bitcoin collateral rather than public funds, tax revenues, or a broader municipal credit pledge.
The bonds are structured in two classes, Series 2026A-1 and Series 2026A-2, and both are scheduled to mature in 2029. The borrower in the underlying loan structure is NH Cleanspark Borrower Trust 2026-1, while the New Hampshire authority serves as lender within the financing arrangement. Moody’s described the rating as provisional, indicating that final terms and closing conditions still matter before the structure is fully executed.
How the bond structure works
According to the rating release, the bonds are limited recourse obligations. That means bondholders do not have a claim on New Hampshire public funds if the deal underperforms, and the issuing authority has no taxing power available to fill any payment gap. Instead, repayment of interest, principal, and transaction expenses depends entirely on the proceeds generated from the bitcoin collateral.
Both bond classes carry a fixed coupon. However, holders of Series 2026A-2 may also receive an additional payment at maturity if bitcoin appreciates from the pricing date. That upside only comes into play after all principal, interest, and expenses have been fully satisfied. In practical terms, the structure blends elements of a fixed-income instrument with a conditional participation in bitcoin price appreciation, though the core repayment mechanism remains collateral-driven.
Custody, liquidation, and administration
The operating framework behind the bonds relies on several digital-asset service providers. Bitgo Bank & Trust, National Association will hold the bitcoin collateral in segregated wallets on behalf of bondholders. Bitgo Prime, LLC will act as the liquidation agent, with responsibility for selling BTC when needed to fund debt service and expenses. Wave Digital Assets LLC will oversee day-to-day transaction administration, while RM Digital Finance LLC is expected to be appointed at closing as a backup administrator in case Wave Digital is unable or unwilling to continue its role.
This setup is central to the transaction because the quality of the rating does not rest only on the value of bitcoin itself. It also depends on whether the custody, administration, and liquidation chain can function reliably under normal and stressed conditions. For a bitcoin-collateralized bond, operational execution is inseparable from credit performance.
Collateral protections and trigger thresholds
Moody’s highlighted a collateral valuation framework built around loan-to-value thresholds. The transaction begins with an initial collateral coverage ratio of 1.60x, and it includes an LTV trigger at 1.40x. If the market value of the bitcoin collateral falls enough to hit that threshold, the structure requires a mandatory full redemption of the bonds.
In its rating analysis, Moody’s used an advance rate of 72.06% and assumed a two-day exposure period. These assumptions were described as consistent with a Ba2 rating and were meant to capture the realities of bitcoin’s historical price volatility and the liquidity profile of the market. The agency’s framework reflects a core challenge of using crypto assets in structured finance: the collateral can be liquid and globally traded, but it can also move sharply over a short time window.
That is why the transaction’s risk controls focus not just on collateral sufficiency at issuance, but also on the ability to react quickly if bitcoin prices decline. The mandatory redemption trigger is intended to prevent prolonged erosion of collateral support, though its effectiveness would still depend on timely execution in the market.
Moody’s view on infrastructure risk
The rating agency also acknowledged that successful liquidation depends on the continued operation of the Bitcoin network and the broader market infrastructure surrounding it. In Moody’s view, bitcoin has historically benefited from continuous network uptime without major wide-scale outages. Still, the agency made clear that digital-asset-backed obligations carry a dependence on technical and market infrastructure that is different from conventional municipal debt or traditional asset-backed securities.
For methodology, Moody’s said it applied its “Market Value Collateralized Loan Obligations” framework published in May 2025. The agency further noted that future rating changes could be driven by changes in collateral performance, compliance with transaction documents, and the actual resilience of liquidation mechanics under stress scenarios.
Why the deal matters
The transaction is notable because it places a state authority at the center of a financing structure backed exclusively by a digital asset. While the bonds are not backed by the state’s balance sheet or taxpayers, the use of a public-sector authority as issuer gives the deal broader visibility than a typical private crypto financing arrangement. It may become an important test case for whether digital assets can be incorporated into more formal segments of U.S. public finance without relying on direct governmental credit support.
That distinction matters. This is not a general obligation bond, nor is it a conventional municipal revenue bond supported by predictable operating cash flows such as tolls, utilities, or lease payments. Instead, the repayment source is a volatile market asset held in custody and sold if necessary. As a result, the transaction sits at the intersection of municipal finance, structured credit, and digital-asset infrastructure.
If the structure performs as designed, market participants may view it as evidence that bitcoin-backed bond issuance can exist within a ratings framework and a regulated issuance channel. If it encounters operational or collateral-management stress, it could reinforce concerns that crypto-native assets remain difficult to integrate into public-market debt products at scale.
Key points for investors to watch
Going forward, investors are likely to focus on several issues. First is the behavior of bitcoin itself, especially during periods of rapid downside volatility. Second is the reliability of custodial segregation and the speed at which collateral can be liquidated when thresholds are breached. Third is governance and compliance: because the bonds depend on a multi-party structure, any weakness in documentation, servicing, or execution could matter materially to bondholder outcomes.
Moody’s said a pre-sale report with further transaction details is expected to be published on its website. The rating was issued by Moody’s Investors Service, Inc. from its New York office, with Sumeet Sablok listed as analyst and Leon Mogunov as associate managing director.
For now, the Ba2 provisional rating does not eliminate the inherent risks of bitcoin-backed credit. What it does provide is a formal credit opinion on how those risks are being structured, mitigated, and monitored. In that sense, the New Hampshire deal may serve as a closely watched experiment in whether digital collateral can support publicly issued bonds within a recognizable credit framework.