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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (16518)	3/2/2003 11:18:08 PM
From: Demetre Deliyanakis	Respond to of 78487

Hi Not all states have monetized the tobacco bonds. i agree that states that have already sold the tobacco bonds are OK,. They could raise cigarette taxes to astronomical levels, and not suffer, since the bonds are held by private investors. However, many states haven't issued the tobacco bonds yet, so they would be reluctant to raise cigarette taxes, and thus depress any future cash flow from the settlement payments. You can't sell a tobacco bond, if the cash flow from the payments is in jeopardy due to high cigarette taxes.