NH part of settlement with tobacco companies
U.S. cigarette makers, including Philip Morris and R.J. Reynolds, say they have reached a settlement with 17 states, including New Hampshire, in a long-running dispute over the amount of payments they are required to make under the 1998 landmark anti-smoking agreement.
Under the settlement, announced Tuesday, the states will receive their share of $4 billion in disputed payments and the manufacturers will receive credits against future payments.
The payments resulted from the 1998 national accord that obliges companies to help cover the health bills of ailing smokers.
States, counties and cities have sold nearly $40 billion of bonds backed by the more than $200 billion in payments that U.S. cigarette makers agreed to make to them over time.
So far in 2013, returns on tobacco bonds have largely outperformed the rest of the $3.7 trillion municipal bond market, despite concerns expressed by credit rating agencies about the decline in tobacco consumption.
In July, Moody's investors service warned that the majority of tobacco bonds sold by states, counties and cities will default if cigarette consumption keeps falling at a 3 percent to 4 percent annual pace.
In December, California and New York's Nassau County tapped reserves for payments on three different series of state tobacco bonds due to insufficient tobacco settlement revenue.
The 46 states that participated in the 1998 agreement shared $6.15 billion in payments in April, up from $6.03 billion in April 2011, according to the National Association of Attorneys General.
Tobacco companies, including Marlboro cigarette maker Philip Morris and Camel cigarette maker R.J. Reynolds have for years disputed the amount of payments they owe after losing market share to companies that did not agree to the 1998 settlement.
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