Euromoney’s 2012 FX survey results

Euromoney’s 2012 FX survey results

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China’s $1.7 trillion hangover

China’s $1.7 trillion hangover

Up to 40% of China’s $1.7 trillion LGFV loans are at high risk of default. What’s a panicking Beijing to do?

November 2000

US securitized bonds: Making hay from tobacco


Four tobacco companies have agreed to pay a proportion of their revenues to 46 US states and territories as compensation for the costs of treating tobacco-related conditions. This amounts to $206 billion over the next 25 years. The master settlement agreement is the largest civil settlement in US history. It has created a massive opportunity for the securitization market, as recipients become keen to turn these future flows into cash now. Even the lawyers want their future fee receivables securitized. Recipients are worried lest any future settlements or event risk bankrupt tobacco companies before they make over these windfall payments. They want bond holders to take that risk. Kay Binnie reports


A Philip Morris advertisement Flickers across a New York television screen advising viewers that the recent tobacco settlement agreement "restricts the marketing of tobacco products ...bans all tobacco company billboards and transit advertising...no more tobacco logos on clothing or merchandise...no more cartoon characters selling cigarettes...strictly prohibits marketing tobacco products to kids...". It's a rather humble announcement, where once gloss, seduction, image, indulgence and temptation dominated. How times have changed. The new order of the late 20th century has put the tobacco industry through a punishing round of litigation that it has lost. Winners and losers The winners are "the settling states", 46 states of the US (excluding Florida, Minnesota, Mississippi and Texas, which had already won a handy $40 billion from the tobacco companies) and seven territories: the District of Columbia, Puerto Rico, the US Virgin Islands, the Northern Mariana Islands, American Samoa and Guam. The winners are also the law...


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