Calif. Reprices $100M of Tobacco Debt

Finestone, Deborah
June 2003
Bond Buyer;6/13/2003, Vol. 344 Issue 31656, p44
Trade Publication
The Golden State Tobacco Securitization Corp. remarketed 100 million dollars of auction-rate debt secured by California's share of revenue from the national tobacco settlement to convert the bonds to a fixed rate. The state opted to convert the debt to lock in a stable fixed rate, according to a Department of Finance spokesperson. California had planned to issue another two billion dollars of tobacco bonds in April 2003 but the deal was postponed then cancelled following a decision against Phillip Morris USA in an Illinois court case that roiled the tobacco debt market. The fallout from the decision caused yields on billions of dollars of outstanding tobacco bonds to jump and rating agencies to downgrade all tobacco securitizations along with the company.


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