Tobacco.org

• Fitch Upgrades 237 and Affirms 24 Tobacco Settlement Asset-Backed Bonds 

Fitch Ratings has upgraded 237 and affirmed 24 outstanding Tobacco Settlement asset-backed bonds as listed below. These actions complete Fitch's review of its tobacco ABS ratings that began with the placement of the bonds on Rating Watch Positive (RWP) in September 2007. . . .

The corporate rating of the domestic tobacco industry incorporates the creditworthiness of the domestic tobacco subsidiaries on a stand-alone basis, without reliance on parental financial support. The recent corporate rating actions reflect the operational and financial improvements of the major industry participants over the past two years and the continued manageability of litigation risk. Fitch's assessment of the domestic tobacco industry centers on class action cases with the greatest near-to-intermediate term risk. Beyond the legal issues, there are several continuing negative pressures on the tobacco industry including extensive smoking bans which diminish demand and rising excise taxes that can reduce pricing flexibility. Despite these industry factors, the tobacco businesses generate substantial free cash flow.

In addition, Fitch has incorporated revised cash flow stresses

Jump to full article »