The latest to enter the tobacco arena is the state of Colorado, where state treasurer Michael Coffman said he would like to sell asset-backed securities representing the entire discounted value of the state's $3.3 billion share of the $206 billion settlement.

The actual amount of debt that Coffman proposes selling is about $900 million to $925 million. He estimated that the present value of the settlement for Colorado is about $1.18 billion, with investment bankers having told him that between 75% and 80% of this amount could be packaged as ABS. However, if the state were to purchase a surety contract, which it will need if there are no other guarantees of payment, the amount would be reduced to about the $900 million level.

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