Virginia plans to sell tobacco bonds backed by settlement revenue
RICHMOND, Va. Virginia is trying again to sell tobacco bonds backed by future payments from a multi-(b)-billion-dollar tobacco settlement.
State officials had planned to offer about 700 (m) million dollars in bonds about two years ago. But the tobacco bond market sank after an Illinois judge ordered Richmond-based Philip Morris U-S-A to pay just over ten (b) billion dollars in a suit over its "lights" cigarettes.
The market has improved, and the state wants to sell between 400 (m) million and 450 (m) million dollars in tax-exempt bonds. They would be backed by 25 percent of Virginia's annual payments from the 1998 Master Settlement Agreement with Philip Morris, R-J Reynolds, Brown and Williamson and Lorillard.
Virginia's tobacco commission plans to vote tomorrow on endorsing next month's sale.
The Tobacco Settlement Financing Corporation -- an independent state entity authorized to sell the bonds -- gave its approval yesterday.
State Treasurer Jody Wagner says the proposal must also be approved by Governor Mark Warner.