State of West Virginia

Four major U.S. tobacco companies and a select group of states and territories signed a Master Settlement Agreement (the “MSA”) on November 23, 1998.  The MSA was the result of the largest civil settlement in U.S. history.  Under the MSA, the major tobacco companies provided the settling states with $246 billion over a 25-year period.

West Virginia anticipated receiving $1.7 billion of payments over 25 years. Instead of waiting to receive those annual payments, the State chose to raise a lump sum amount by selling their rights to the future tobacco settlement payments via a bond issuance.

The Solution

Crews served as a senior manager for the Tobacco Settlement Finance Authority’s $911,141,503 Taxable Tobacco Settlement Asset-Backed Bonds. The State was able to raise $911 million by selling 40-year bonds to investors. These funds paid off a portion of the unfunded liability of the Teachers’ Retirement System.

The Difference

Crews was instrumental in the six year process of conception – to authorizing legislation – to the sale of the bonds.

Crews partnered with National banking team member in:

  • Educating the Legislative and Executive branches on the securitization structure,
  • Actively participating in the rating process and
  • Underwriting the bonds