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Article: New Jersey Sells $3.6B of Tobacco Debt.
- Article from:
- The Bond Buyer
- Article date:
- January 24, 2007
- Author:
CopyrightCOPYRIGHT 2007 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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After shortening the final maturity to avoid potential legal challenges to a $3.6 billion bond sale, New Jersey yesterday secured a new source of state revenue after refinancing and restructuring its tobacco settlement-backed debt.
The Bear, Stearns & Co.-managed deal -- which was marketed through the New Jersey Tobacco Settlement Corp. -- enables the state to capture 24% of the dollars the tobacco industry pays the state each year under the 1998 Master Settlement Agreement between cigarette makers and 46 states.
States and eligible counties leveraged their expected cut of the settlement by selling bonds backed by the annual payments. The earlier deals ...