CHICAGO - The Michigan Tobacco Settlement Finance Authority plans to enter the market Tuesday to restructure nearly $190 million of outstanding tobacco bonds in a transaction aimed at generating $60 million to wipe out the state's current general fund deficit.

Michigan officials expect to achieve their savings goal with the refunding bonds by using a structure that pushes out the maturities of the existing taxable debt that sold in 2006, replacing it with tax-exempt bonds. The tax exemption is allowed because part of the proceeds from the original sale in 2006 - as well as the new proceeds generated from the upcoming transaction - will finance projects that qualify for tax-exempt financing under the Internal Revenue Service Code.

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