As the tobacco industry braces for possible new regulatory supervision and legislation, the risk factors to the credit quality of the companies in the industry remain high in the medium term, according to a report by Moody's Investors Service. Outstanding tobacco settlement securitizations, however, still remain stable.

"The driving force of all the securitizations is the volume of tobacco consumption," said Nicolas Weill, vice president and senior credit officer at Moody's. "So while we do make a number of assumptions about how the volume is going to decrease given price increase, tax increases, regulation, we also make assumptions that the tobacco manufacturers could have their own rating impacted by future litigation."

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