DALLAS -- Alabama plans to issue $652 million of bonds Thursday secured by settlement payments stemming from the Deepwater Horizon oil spill in the Gulf of Mexico.

The debt will securitize payments U.K. oil producer BP Plc agreed to make to Alabama as part of its settlement with five Gulf Coast states for damage caused by the 2010 disaster, in which a well blow out triggered an explosion on the drilling rig Deepwater Horizon, killing 11 rig workers and spilling more than 3 million barrels of oil into the gulf over three months. The National Oceanic and Atmospheric Administration calls it the largest oil spill in U.S. waters.

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