New Hampshire rejects bitcoin bond proposal tied to CleanSpark

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New Hampshire rejects bitcoin bond proposal

Highlights

New Hampshire's Executive Council voted 3-2 to reject a proposal for conduit bitcoin-backed bonds associated with CleanSpark and $160 million in bitcoin collateral.
The proposed limited-recourse bond structure included BitGo as custodian and set a liquidation trigger if collateral value fell below $140 million, insulating state taxpayers from direct risk.
Moody's assigned the bonds a Ba2 speculative-grade rating in March, and critics argue the rejection may reduce Business Finance Authority revenue and hinder economic growth.

Bond structure and council vote

As reported by The Block, New Hampshire's Executive Council voted 3-2 on Wednesday to reject a proposal that would have let the New Hampshire Business Finance Authority act as a conduit issuer for bonds financing a private borrower tied to CleanSpark.

The proposed transaction called for the bitcoin mining and data center company to post about $160 million in bitcoin as collateral for the bonds. The structure also included a liquidation and redemption trigger if the collateral value fell below $140 million, while BitGo was designated as custodian for the bitcoin holdings in segregated wallets.

The bonds were structured as limited-recourse obligations, meaning bondholders would have claims only on the bitcoin collateral and related proceeds. Under that framework, New Hampshire taxpayers and the state's general credit would not have carried liability or direct risk from the deal.

Political backing and market implications

Governor Kelly Ayotte had backed the proposal, describing it as a historic and innovative way to bring more investment opportunities to the state without putting state funds or taxpayer dollars at risk.

In March, Moody's Investors Service assigned the proposed bonds a Ba2 rating, a speculative-grade assessment two notches below investment grade. The rating highlighted that the financing was being evaluated within higher-risk capital markets territory even as supporters argued the collateral structure limited exposure for the state.

State Representative Keith Ammon criticized the council's decision in a post on X, saying it would reduce revenue that the Business Finance Authority could receive from future conduit bonds and weigh on economic growth. He also urged the council to reconsider the vote at a future meeting after reviewing the relevant facts and information.

In our earlier coverage of CleanSpark (CLSK), we highlighted the company’s higher bitcoin production for June and the expansion of its reserves, alongside elevated short interest that continued to weigh on sentiment. We also noted that using part of its bitcoin holdings as collateral can constrain reported liquidity, even as the firm builds mining capacity and remains a major public bitcoin holder.

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