Litigation Settlement Monetized Fee Trust III, 2001-2
Litigation Settlement Monetized Fee Trust IV, 2002-1
Key Rating Drivers:
The collateral securing the above transactions consists of notes backed by fee awards payable to legal firms (participating firms) that served as outside counsel to U.S. states in their settlement agreement with the domestic tobacco industry. The fee awards are payable to the participating firms under a fee payment agreement with the tobacco manufacturers. The fee payment agreements set forth the amount payable to each state's outside counsel(s). The amounts payable under the fee agreements were awarded by an arbitration panel and are final, binding, and non-appealable.
The obligations under the fee payment agreements are several and not joint obligations of each Original Participating Manufacturer (OPM) and are made quarterly based on relative market share, with quarterly payments generally subject to an aggregate national cap of
Fitch's rating is based on the credit quality of the bonds, which is based on the credit quality of the fee awards payable to the participating firms by the OPMs. Since the amounts payable under the fee payment agreements are based on relative market share, Fitch views this obligation as an industry obligation. Consequently, the rating of these bonds is capped at Fitch's assessment of the domestic tobacco industry. In Fitch's opinion, the domestic tobacco industry is rated 'BBB' on an unsecured basis. The ratings are sensitive to changes in the assessment of the credit quality of the industry as any shift would affect the ratings of these bonds.
Additional information is available at 'www.fitchratings.com'.
--'U.S. Tobacco Settlement ABS Criteria' (
--'Global Structured Finance Rating Criteria'(
U.S. Tobacco Settlement ABS Criteria
Global Structured Finance Rating Criteria
Source: Fitch Ratings
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