Tuesday, June 24, 2014

The $96B tobacco bond market is declining

The $96B tobacco bond market is continuing its decline, as most Americans have quit smoking at a faster rate than estimated in the previous decade - when most of the bonds were sold. E-cigarettes have been a major factor to the recent decrease, along with prior declines due to public smoking bans and new excise taxes. A forecast last month from Moody's Investors Service estimates 65-80% of tobacco bonds are headed toward default.