It is looking increasingly likely that England will go the way of its neighboring U.K. countries and issue an outright ban on smoking in public places. How this might affect pub securitizations is still unclear, but Fitch Ratings analysts said that the full smoking ban in Scotland slated to take effect at the end of March should paint a clearer picture of what to expect.

The Health Bill issued in October last year proposed a partial ban on smoking in public places and also moved the date of introducing the ban forward to summer 2007 rather than the end of 2008. "By the end of last year, a Commons select committee had branded the proposal unfair and unworkable and have been working to get a full ban on smoking passed at the earlier date," said Paul Crawford, an analyst at Fitch last week during a teleconference on the sector. "We will have to wait and see how it pans out but the full smoking ban in Scotland - where a number of pub companies have transactions with exposure to Scotland - will no doubt be used as a learning experience to get up to date one how the ban might affect transactions with exposure in England."

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