In a groundbreaking move within the financial sector, Moody’s Ratings has assigned a provisional Ba2 rating to a series of revenue bonds backed by Bitcoin, slated for issuance through New Hampshire’s Business Finance Authority. This rating applies to bonds with a total face value of up to $100 million, marking a significant milestone as it is reportedly the first time a major credit agency has rated bonds directly collateralized by Bitcoin.
The bonds are set to be issued under the Waverose Finance Project and are due in 2029. Unlike traditional bonds, these instruments are labeled as limited-recourse, meaning that no public funds from New Hampshire are at risk. Instead, repayment will hinge solely on the liquidation of Bitcoin that is being held in custody by BitGo Bank & Trust. This setup offers an interesting perspective on how cryptocurrency can be leveraged in the traditional finance landscape.
Moody’s provided insight into the rating’s methodology, articulating that the agency applied a 72.06% advance rate alongside a two-day exposure period reflective of Bitcoin’s specific characteristics. The advance rate is indicative of the cryptocurrency’s historical volatility and liquidity, elements that are crucial when assessing the risk involved with such a financial instrument. The bonds have an initial overcollateralization set at 1.60 times the loan value, with a loan-to-value trigger set at 1.40 times. This mechanism ensures that if the price of Bitcoin decreases to a certain threshold, the asset will be liquidated to cover the loans.
This rating comes at a time when the appetite for Bitcoin-linked debt is gaining traction in the market. In late 2025, the crypto lender Ledn received a BBB- rating on a $188 million asset-backed security that pooled Bitcoin-backed loans, representing a significant advancement in the ratings assigned to cryptocurrency-related financial products.
Despite the optimism, challenges persist in the sector. In February, a sharp decline in Bitcoin prices led to the liquidation of approximately 25% of the underlying loan pool connected to another cryptocurrency lending project. Such market volatility raises questions about the long-term viability of cryptocurrencies as collateral.
Currently, the New Hampshire bonds have yet to be priced, but Moody’s has indicated that a pre-sale report will be available soon. The timing of this issuance coincides with a broader trend of increasing interest from credit agencies in the rapidly evolving digital finance landscape. Moody’s has previously explored Blockchain technology, including on-chain ratings with Solana in June 2025.
Rajeev Bamra, head of strategy for the digital economy at Moody’s Ratings, emphasized the firm’s commitment to innovation in finance, stating that they aim to explore new pathways for the digital finance ecosystem to access their credit assessments. This sentiment underlines the agency’s ongoing adaptability and examination of cryptocurrencies as legitimate financial assets in today’s economy.
