If you don’t consider yourself a speculative investor, but still hold tobacco bonds originally purchased as investment-grade securities, Moody’s recent announcement may give you pause.
This month, the rating agency announced it had placed more than $20 billion of municipal bonds backed by revenues from tobacco companies under review. Moody’s is concerned that a proposed settlement between the major tobacco manufacturers and 17 states, the District of Columbia and Puerto Rico may reduce the cash flow that supports the bonds.
Our friends over at FMS, Bonds Inc. are at it again. Take a look at this article by James A. Klotz originally published on Jan. 29.
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