Tobacco.org

Light cigarette ruling to further sideline tobacco bonds  

A U.S. Supreme Court ruling on Monday allowing tobacco companies to be sued under state law for deceptive advertising of 'light' cigarettes will further sideline the issuance of tobacco bonds while making them an even riskier investment in the secondary market, municipal market participants said.

'As far as tobacco goes, this lights case pretty much shuts the door on the issuance of tobacco bonds for a while,' said Iowa Treasurer Mike Fitzgerald.

Iowa last year authorized a second securitization of its share of a 1998 settlement with U.S. tobacco companies as long as the bond sale could raise at least $183 million for capital projects.

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