California, Ohio Use Reserves for Tobacco Bonds

California, Ohio and Virginia will use reserve funds to pay interest and principal on bonds backed by tobacco company payments under a 1998 health-care settlement, according to a report by Herbert J. Sims & Co. Payments to the states by Altria Group Inc. (MO)’s Philip Morris unit, Reynolds American Inc. (RAI) and other companies have declined on lower U.S. cigarette sales and as the companies lose market share to tobacco manufacturers that didn’t participate in the settlement, according to Richard Larkin, director of credit analysis at Sims in Iselin, New Jersey. “Any time you see a municipal bond go to their reserve fund, it’s a significant sign of trouble,” Larkin said in a telephone interview. “It’s not an imminent default, but it’s a sign that cash flow is certainly far weaker than...

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Smokers See Some Smoking Brands As Safer

One in five smokers believes some brands of Lucky Strike cigarettes are safer than others, a study has found. Smokers of ”gold”, ”silver” or ”slim” cigarettes were also more likely to think their brands were less harmful. The findings highlight the power that packaging can have on risk perception, and come as the federal government prepares to introduce its plain-packaging legislation. As part of an international study, published in the journal Addiction, researchers surveyed more than 8000 current and former smokers, including more than 2000 Australians, about their smoking beliefs. Females were more likely to believe some brands might be...

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Danville company proposes new use for tobacco

If a new company at Dan River Business Development Center has its way, that will happen — but the product will be used to create biofuels instead of cigarettes. Peter Majeranowski, a founder and managing director of Tyton BioSciences, said years of development have gone into the product, which will be genetically modified to produce “both ethanol and biodiesel at yields that far surpass the traditional crops of corn and soy.” And, because corn and soy are also food crops, using tobacco to create the same products can alleviate the complaints that food prices are rising because of demand for crops as fuel, Majeranowski said. Smoking-grade...

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