Fitch to Rate Tobacco Settlement Financing Corporation (Rhode Island), Ser 2014A&B; Presale Issued

NEW YORK--()--Fitch Ratings expects to assign the following ratings and Rating Outlooks to the series 2014A&B bonds issued by the Tobacco Settlement Financing Corporation (Rhode Island):

--$10,660,000 series A serial bond due June 1, 2015 'BBB+sf'; Outlook Stable;

--$11,125,000 series A serial bond due June 1, 2016 'BBB+sf'; Outlook Stable;

--$11,590,000 series A serial bond due June 1, 2017 'BBB+sf'; Outlook Stable;

--$10,585,000 series A serial bond due June 1, 2018 'BBB+sf'; Outlook Stable;

--$11,010,000 series A serial bond due June 1, 2019 'BBB+sf'; Outlook Stable;

--$11,470,000 series A serial bond due June 1, 2020 'BBB+sf'; Outlook Stable;

--$11,975,000 series A serial bond due June 1, 2021 'BBB+sf'; Outlook Stable;

--$12,530,000 series A serial bond due June 1, 2022 'BBB+sf'; Outlook Stable;

--$13,150,000 series A serial bond due June 1, 2023 'BBB+sf'; Outlook Stable;

--$13,835,000 series A serial bond due June 1, 2024 'BBB+sf'; Outlook Stable;

--$14,585,000 series A serial bond due June 1, 2025 'BBB+sf'; Outlook Stable;

--$15,405,000 series A serial bond due June 1, 2026 'BBB+sf'; Outlook Stable;

--$15,725,000 series A serial bond due June 1, 2027 'BBB+sf'; Outlook Stable;

--$15,325,000 series A serial bond due June 1, 2028 'BBB+sf'; Outlook Stable;

--$14,980,000 series A serial bond due June 1, 2029 'BBB+sf'; Outlook Stable;

--$71,540,000 series A term bond due June 1, 2034 'BBB+sf'; Outlook Stable;

--$70,575,000 series A term bond due June 1, 2039 'BBB+sf'; Outlook Stable;

--$37,445,000 series B turbo bond due June 1, 2039 'BBB+sf'; Outlook Stable;

--$101,165,000 series B turbo bond due June 1, 2044 'BBB+sf'; Outlook Stable;

--$118,980,000 series B turbo bond due June 1, 2049 'BBB+sf'; Outlook Stable;

KEY RATING DRIVERS:

Tobacco Industry Rating: Cash flows to the bond trustee are dependent on the Master Settlement Agreement (MSA) payments made by the tobacco companies; as a result, tobacco settlement ABS is capped at 'BBB+sf', which is one notch above Fitch's view of the tobacco industry.

Transaction Structure: The capital structure of the 2014A&B bonds as well as credit enhancement in the form of a debt service reserve account is adequate.

RATING SENSITIVITIES:

Fitch runs different declines in MSA payment scenarios when evaluating the rating sensitivity for tobacco settlement ABS. Even in the most severe stressed scenario of a 30% one-time decline in the MSA payment there is no rating migration among the serial bonds. All term bonds would be downgraded in the severe stress of a 30% MSA decline. For further discussion of Fitch's sensitivity analysis, please see the related presale report.

The presale report is available to all investors on Fitch's website at 'www.fitchratings.com'. For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at 'webmaster@fitchratings.com'.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria', May 2014;,

--'U.S. Tobacco Settlement ABS Criteria', July 2014.

Applicable Criteria and Related Research: Tobacco Settlement Financing Corporation (Rhode Island), Series 2014 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=752491

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

U.S. Tobacco Settlement ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=751305

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=841654

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Lauren Tierney
Director
+1-212-908-9168
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Melvin Zhou
Director
+1-212-908-0503
or
Committee Chairperson
Steven Stubbs
Senior Director
+1-212-908-0676
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Lauren Tierney
Director
+1-212-908-9168
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Melvin Zhou
Director
+1-212-908-0503
or
Committee Chairperson
Steven Stubbs
Senior Director
+1-212-908-0676
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com