CHICAGO — The majority of tobacco settlement bonds rated by Moody’s Investors Service will default if smokers keep up their current pace of kicking their habits or cutting back on them, the agency warns in a new report.

Nearly 75% of the bonds rated by the agency that are backed by payments under the 1998 Master Settlement Agreement between most states and participating tobacco manufacturers are headed towards default if consumption dwindles annually at a 3% to 4% rate. Moody’s rates a total of 32 tobacco settlement securitizations with a balance of $20.4 billion outstanding.

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