Rhode Island’s $621 million sale of tobacco settlement asset-backed bonds, two months after a state judge cleared the deal, was a huge boost for the Ocean State, said an attorney involved with the case.

“It’s absolutely good for the corporation and the state and frankly, good for all the bondholders,” Timothy Mungovan, a Proskauer Rose LLP partner who represented the Tobacco Settlement Financing Corp. of Rhode Island, said in an interview. “We believe it’s a shot in the arm for Rhode Island.”

Rhode Island, which came to market March 11, received the proceeds Thursday.

The issuance, said Mungovan, will result in an immediate payment of $36 million to the corporation and to Rhode Island, and is expected to save the state nearly $1 billion over 40 years.

On Jan. 15, Rhode Island Superior Court Judge Michael Silverstein granted summary judgment to the corporation and dismissed a lawsuit by OppenheimerFunds. Oppenheimer, in its capacity as a holder of Series 2007 B and C bonds, had argued that the transaction wrongfully created an amendment of the 2007 indenture, and would have constituted a fraudulent transfer intended to circumvent a subordination structure.

Oppenheimer said after the ruling that it disagreed with the decision. Quinn Emanuel Urquhart & Sullivan LLP represented Oppenheimer in the case.

Mungovan said it was important that Silverstein rule quickly and that the corporation come to market while conditions were still favorable. Proskauer requested expedited discovery and then moved for early summary judgment, which the Rhode Island court granted in all respects in mid-January.

“Most important about the transaction was the decision by Judge Silverstein,” said Mungovan. “The bond market had been favorable, but was threatening to shift at any moment. If we had been stuck in a long, drawn-out case, we would not have been able to get to market today. Our goal was to get to market while the market was open and favorable.”

Citi and Bank of America Merrill Lynch were lead managers, according to the official statement.

Under the 1998 agreement, tobacco companies agreed to pay 46 states for expenses related to smoking illnesses. In its aftermath, state officials formed the corporation in to raise money, selling bonds backed by future settlement revenue in exchange for the upfront money.

“Judge Silverstein did an extraordinary job managing the lawsuit and I’m not just saying that because he ruled in our favor,” Mungovan said. Silverstein has served on the Superior Court since 1994.

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