A recent report from Moody's Investors Service stated that tobacco securitization could hit $5 billion in 2001, doubling last year's total issuance of $2.5 billion.

"The issuance should include major transactions sponsored by various states as well as transactions sponsored by certain counties or pools of counties," writes Nicolas Weill, vice president and senior credit officer at Moody's and author of the report.

There are currently two deals in the pipeline, totaling $1.4 billion dollars. A $900 million transaction lead managed by Bear Stearns for the state of South Carolina is set to price in late February or early March, while a $500 million offering from Washington, D.C. lead managed by Salomon Smith Barney is expected to hit the market at about the same time.

The most recent deal was from Ulster County, N.Y. It was a $28 million transaction that priced in late January.

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