Minnesota expects to receive nearly $320 million in tobacco payments in FY 2012-13.
http://www.tcdailyplanet.n
Gov Dayton proposes "borrowing" $700 million from future tobaccos settlement revenue. If it is a true loan the interest rate will be relatively good but that will add to the potential liability of the state of MN.
If sold as a future "securitization" with no future liability to MN (a "clean sale") the rate of return will be fairly low. (think of selling bad debt). The future payments depend on mostly "big tobacco" remaining solvent businesses and people continuing to smoke primarily "big tobacco" brands.
Maybe, maybe not. Off brand and "bootleg" cig sales are growing as part of market share, abet slowly. The original master settlement had some odd provisions. In one non-settlement ("small") tobacco could join. If they didn't they would need to escrow 150% of the payment in case their are any future claims against them. The original tobacco litigation is based on the idea that cig sellers deceived the public about the dangers of smoking. It's hard to see how new ("small") tobacco is doing this.
Of course, if new/small tobacco doesn't have the settlement surcharge they potentially have a price advantage over "big tobacco". It is slow but legal challenges are slowly making their way up the court ladder. Basically, the tobacco settlement is not the best future revenue stream.
If you in the mood to read here is an explanation of tobacco securitization Iwrote two years ago.
http://freedomtoact.blogsp
