W.Va. Completes Tobacco Bond Deal for $807m

West Virginia will get $807 million in up-front cash by issuing bonds, promising investors future annual payments from the state's multibillion-dollar settlement with major tobacco companies, The Associated Press reported late today.

(Update: The AP article is drawn from this story from The Charleston Gazette.)

"This landmark deal is the single-largest West Virginia bond issue and the largest taxable tobacco securitization in the United States to date, said officials from Citigroup, the lead bookrunning manager on the transaction," Manchin's office said in a statement.

The successful deal follows several near misses, including a $524 million deal proposed in 2002, in which the state sought to securitize proceeds from the landmark 1998 tobacco settlement to generate cash.

But James F. Haddon, managing director for Citigroup's Municipal Securities Division, noted in today's statement that “amid challenging market conditions due to rising interest rates, it is remarkable that the state was able to accomplish its goal."

Volatile market conditions had been reported earlier by The Charleston Gazette and MetroNews, among others.

But there appears to be at least one declaration that today's bond deal "fell through."