Jump to full article: Des Moines (IA) Register, 2008-12-11
Author: TONY LEYS
Intro: State administrators have hit a glitch in their plan to gain $183 million in immediate cash for the rights to future payments from cigarette makers. The problem? Nobody wants to pay the asking price.
Legislators voted last year to sell off the rights to about $16 million a year that Iowa receives from tobacco companies. The payments are the result of a 1998 lawsuit settlement, in which the companies agreed to pay up to $2 billion to Iowa over 25 years.
Iowa sold off the rights to most of those payments for about $500 million in 2002. State officials hoped to do the same with what's left, but they have been unable to find investors willing to pay the asking price.
State Treasurer Michael Fitzgerald said the credit market has tightened, and the best he could hope to raise would be $130 million to $150 million. "Right now, nobody wants tobacco bonds," Fitzgerald said.
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