Jefferies to Underwrite First Bitcoin-Backed Muni Transaction for New Hampshire

Reporting: Hoa P. Nguyen

Jefferies will serve as underwriter and payment agent for New Hampshire for the first-ever bitcoin-backed municipal transaction, which is expected to come to market as early as the first quarter of 2026, according to people close to the deal.

The $100 million conduit bond, which is a concept proposed by the Securities and Exchange Commission-registered investment advisory firm Wave Digital Assets in partnership with Rosemawr Management, will be issued via New Hampshire’s Business Finance Authority, or BFA.

Orrick is the legal counsel for the issuer. Digital asset infrastructure company BitGo Trust will serve as custodian for the bitcoin collateral. The transaction is awaiting approval from the state governor and its executive council. In May, Gov. Kelly Ayotte signed a law that enables the state treasurer to invest up to 5% of its public funds into precious metals and digital assets with a market capitalization of over $500 billion, marking the establishment of the nation’s first strategic crypto reserve.

In terms of the deal mechanics, the transaction will be backed by an overcollaterialized statutory trust of bitcoin to provide multiple layers of redundancy and avoid single points of failure, according to James Key-Wallace, executive director of the BFA.

“The trust has automatic orders to liquidate the bitcoin in the trust to pay bondholders if the value of the bitcoin dips below [a certain threshold] – the idea here was to create a mechanism from a lender’s perspective that works the same way to protect themselves as lenders, as if they were lending against conventional liquid assets,” Key-Wallace explained. The BFA’s fees from the transaction will support the Bitcoin Economic Development Fund, which reinvests in programs that promote statewide business growth.

The transaction has thus far garnered interest from five credit ratings agencies, according to Les Borsai, co-founder of Wave, who expressed confidence that a rating will be provided and that the deal team is working toward the outcome of an investment-grade rating.

Prior to conceptualizing the bitcoin-muni crossover transaction, Borsai’s team was involved in “risk bids” through the receivers in bankruptcy courts to buy alternative assets at a discount, and later contributed to a request for a proposal for a mandate to manage the U.S. Marshal Service’s alternative tokens, he said.

The recent “orderly liquidations” of bitcoin exchange traded funds, or ETFs, is “fairly telling and useful in terms of showing that the market for digital assets is resilient and robust,” said Orion Mountainspring, partner at Orrick specializing in structure finance and digital assets. “Bondholders investing in a bond secured by a digital asset should be able to take some comfort in the idea that their collateral has value and that the liquidation mechanism works,” he added.

Jefferies declined to comment.