BRADENTON, Fla. - As Louisiana's regular legislative session winds down, lawmakers have given little attention to a bill that would securitize the remaining 40% of the state's Master Settlement Agreement with tobacco companies.
Rep. Bryan Adams, R-Gretna filed House Bill 689 to advance Gov. Bobby Jindal's plan to authorize $875 million of tobacco revenue bonds to fund higher education scholarships and coastal restoration.
HB 689 was read once and referred to the Committee on Appropriations, where Adams is vice chairman.
The committee has not scheduled any hearings on the bill, and the session ends July 11.
In addition to inaction in the House, the Senate has shown little interest in the bond plan, according to the Advocate newspaper.
"I don't see the Legislature pushing to do that," Senate Finance Chairman Jack Donahue, R-Mandeville, told the paper on May 29. "It's not very prudent use of the funds."
In mid-May, the Louisiana Tobacco Settlement Financing Corp. gave preliminary approval to the securitization, pending authorization by the Legislature.
The corporation authorized staff to prepare for issuing the bonds using the same finance professionals that worked on the state's $659.7 million tobacco bond refunding in 2013.
Those professionals included Citi as the book-runner and Public Resources Advisory Group Inc. as financial advisor. Hawkins Delafield & Wood LLP and Foley & Judell LLP were co-bond counsel. Orrick, Herrington & Sutcliffe LLP and Breazeale, Sachse were underwriters' counsel.
State Treasurer John Kennedy, who chairs the State Bond Commission and is a member of the tobacco corporation board, objected to the procedures adopted by the corporation to prepare for the additional securitization. He said too little due diligence had been done to prepare for the transaction.