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• Fitch Affirms Over $14.6B In U.S. Tobacco Settlement ABS 

Fitch Ratings has affirmed over $14.6 billion in outstanding tobacco settlement bonds. Fitch's rating of the tobacco settlement asset-backed bonds relies on the rating of the U.S. domestic tobacco industry and the payment of bond principal by its stated legal final maturity under Fitch's cash flow stress scenarios. A detailed ratings list follows the end of the release.

Fitch currently rates the U.S. domestic tobacco industry 'BBB-' with a Stable Outlook. Fitch revised the sector's Outlook to Stable from Negative on May, 16, 2006 on improvements in both the litigation and operating environment, in addition to the tobacco companies' improved financial condition.

The tobacco industry rating is primarily driven by the credit profiles of the three largest public tobacco manufacturers, Altria Group, Inc. (Issuer Default Rating of 'BBB+' by Fitch), Reynolds American Inc. (IDR rated 'BB'), and Loews Corporation (IDR rated 'A'), which comprise approximately 89.2% of U.S. domestic market share with Altria Group, Inc. the market leader, comprising approximately 50%.

Tobacco settlement bonds are tied to Fitch's industry rating of the tobacco industry.

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