Last week New York City tossed the first batch of tobacco-backed bonds into the asset-backed securities market, receiving a warm reception from investors who will be seeing several tobacco-backed deals coming down the pike.

"We had a real strong deal," said Allen Anders, director of public finance for the city. "We had $600 million in bonds to offer today, and we had $1 billion of priority orders from institutions. So we were oversubscribed on all our securities."

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