Michigan Tobacco Settlement Finance delays sale of $187.214 million tobacco settlement bonds

By Cristal Cody

Springdale, Ark., June 10 - The Michigan Tobacco Settlement Finance Authority delayed the sale of $187.214 million tobacco settlement asset-backed bonds because of a similar sale in South Carolina, a source with the state said Tuesday.

The $123.135 million series 2008A fixed-rate current interest turbo term bonds and $64.079 million series 2008B capital appreciation turbo term bonds are now expected to price over the next two weeks.

South Carolina plans to price tobacco asset-backed bonds on June 12, the source said.

Michigan's series 2008A bonds are due June 1, 2038, and the series 2008B bonds are due June 1, 2058.

Citigroup Global Markets is the senior manager of the negotiated sale. Co-managers are Depfa First Albany Securities LLC, Comerica Securities Inc., Fifth Third Securities Inc., Lehman Brothers, Loop Capital Markets LLC and Merrill Lynch & Co.

Proceeds will be used to pay $60 million for a deposit to the state's general fund and to refund the authority's series 2006B and 2006C indexed floating-rate turbo term bonds.

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