Insight: E-cigarettes could stub out tobacco bonds sooner than thought

June 24, 2014 5:01 AM

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Insight: E-cigarettes could stub out tobacco bonds sooner than thought

NEW YORK (Reuters) - The rapid growth of electronic cigarette sales poses a rising but under-appreciated risk to holders of as much as $96 billion of bonds tied to payments tobacco companies make to U.S. states from a sweeping legal settlement in 1998.

Tobacco bonds were already forecast by many analysts to begin defaulting within the next 10 years. That's because Americans have given up smoking at a faster rate than estimated when most of the bonds were sold in the previous decade.

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