California officials have tapped reserves for payments on two series of state tobacco bonds due to insufficient tobacco settlement revenue, according to notices filed with Municipal Securities Rulemaking Board on Monday.
Moody’s Investors Service takes the decline so seriously that it said in July a majority of tobacco bonds sold by U.S. states, counties and cities will default if cigarette consumption keeps falling at a 3 percent to 4 percent annual pace.
Can’t have it both ways, if you don’t want anyone to smoke then you shouldn’t be selling bonds.
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