Philip Morris Faces Lawsuit By AGs If It Misses MSA Payment

Albanese, Elizabeth
April 2003
Bond Buyer;4/7/2003, Vol. 344 Issue 31609, p6
Trade Publication
Attorneys general from 46 states will send cigarette company Philip Morris USA Inc. a letter during early April 2003 stating their intention to file a lawsuit against the firm if a Master Settlement Agreement (MSA) payment due on April 15 is missed. The attorneys general will also file an amicus brief in an Illinois trial court that would make them intervenors in a lawsuit brought against Philip Morris by a group of smokers who allege the firm's advertising of its Marlboro Light and Cambridge Light cigarettes was fraudulent and led them to believe light cigarettes are a better health choice than regular cigarettes. The appeal bond situation has had dramatic consequences for both Philip Morris' corporate credit and for municipal bonds backed by MSA payments. Philip Morris' senior corporate debt has been downgraded from the A category to Baa 1 by Moody's Investors Service Inc. and to BBB-plus by Fitch Ratings Inc., and both of those agencies have also lowered the ratings for municipal tobacco bonds into the low A category.


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