BRADENTON, Fla. — Moody's Investors Service on Tuesday placed the tobacco settlement revenue bonds of issuers in 17 states and two territories under review with direction uncertain because of a settlement with tobacco companies announced in December.

The action affects $20.5 billion of asset-backed securitizations of payments that major tobacco manufacturers owe to 46 states and certain territories pursuant to the 1998 Master Settlement Agreement.

The review is the result of credit implications of the proposed agreement announced on Dec. 18 to settle payment disputes for the years 2003 through 2012, according to Moody's analyst Jinyang Wang.

The new agreement remains subject to approval by an arbitration panel.

"If approved, several provisions of the agreement will reduce cash flow to most term bonds in the securitizations sponsored by states joining the agreement," Wang said.

On a net basis the states will receive 54% of about $4 billion in dispute, which is "significantly" less than the 100% that Moody's said it expected.

The settlement also includes a new formula for addressing future payment disputes that suggests that associated settlements at less than 100% could continue for a long period of time, potentially for the entire term of the bonds, Moody's said.

The agreement also indirectly impacts the securitizations sponsored by the states that do not participate in it "because they set a precedent that their recoveries of future disputed amounts can be less than 100%, and that the payment disputes will continue for a long period of time, both credit negatives," Wang said.

Moody's said it is also correcting errors in the cash flow models used in rating tobacco settlement revenue bonds that are expected to result in a positive credit impact on term bonds and, in some cases, "a slightly negative credit impact."

Here are the issuers under review by Moody's:

The Buckeye Tobacco Settlement Financing Authority of Ohio, Series 2007.

The Los Angeles County, Calif., Tobacco Securitization Agency, Series 2006A turbo bonds.

The Merced County, Calif., Tobacco Securitization Agency, Series 2005A2 and 2005A4.

The California Statewide Financing Authority, Series 2002.

The Fresno County, Calif., Tobacco Securitization Agency, Series 2002.

The Alameda County, Calif., Tobacco Securitization Agency, Series 2002.

The Stanislaus County, Calif., Tobacco Securitization Agency, Series 2002.

The San Diego County Tobacco Securitization Authority of Southern California.

The city of San Diego Tobacco Settlement Revenue Funding Corp.

The Sacramento County Tobacco Securitization Authority of Northern California.

The Golden State Tobacco Securitization Corp., Calif., 2007 Indenture.

The Children's Trust of the Commonwealth of Puerto Rico, Series 2002.

The District of Columbia Tobacco Settlement Financing Corp., Series 2001.

The Educational Enhancement Funding Corp. of South Dakota, Series 2002A and 2002B.

The Michigan Tobacco Settlement Finance Authority, Series 2006 and 2008.

The Northern Tobacco Securitization Corp. of Alaska, Series 2006.

The New York Counties Tobacco Trust I, Series 2000, Trust II, Series 2001, and Trust III, Series 2003.

The Niagara County, N.Y., Tobacco Asset Securitization Corp., Series 2000.

The Rensselaer County, N.Y., Tobacco Asset Securitization Corp., Series A.

The Rockland County, N.Y., Tobacco Asset Securitization Corp., Series 2001.

The Ulster County, N.Y., Tobacco Asset Securitization Corp., Series 2001.

The Tobacco Settlement Authority of Iowa, Series 2005.

The Tobacco Settlement Authority of Washington, Series 2002.

The Tobacco Settlement Finance Authority of West Virginia, Series 2007.

The Tobacco Settlement Financing Corp. of New Jersey, Series 2007-1.

The Tobacco Settlement Financing Corp. of the Virgin Islands, Series 2001.

The Louisiana Tobacco Settlement Financing Corp., Series 2001A and 2001B.

The Rhode Island Tobacco Settlement Financing Corp., Series 2002A and 2002B.

The Virginia Tobacco Settlement Financing Corp., Series 2007.

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