Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: Friday, March 5, 1999

Release #077-99

Contact: Colleen Roche/Curt Ritter (212) 788-2958
Comptroller's Office: David Neustadt 212/669-3747


TOBACCO SETTLEMENT ASSET SECURITIZATION CORPORATION ANNOUNCES UNDERWRITING TEAM

The Tobacco Settlement Asset Securitization Corporation (TSASC), a local development corporation recently established by New York City, today announced its selection of managing underwriters for its proposed Tobacco Settlement Bonds. The selection was made after consultation with and based on the recommendations of representatives of Mayor Rudolph W. Giuliani and Comptroller Alan C. Hevesi. TSASC is expected to issue approximately $2.5 billion of bonds over a four-year period payable from payments to be made by the four largest tobacco companies pursuant to a settlement of litigation. The right to receive those payments will be sold by the City to TSASC. The proceeds of the Tobacco Settlement Bonds will be included in the City's budget, subject to the budget adoption process.

The senior managing underwriters for TSASC's Tobacco Settlement bonds will be Bear Stearns & Co. Inc., J.P. Morgan & Co. and Solomon Smith Barney, with Salomon Smith Barney appointed as book-running senior manager for the initial bond issue, which is expected to occur in July 1999. The initial firms selected to be senior co-managers are Morgan Stanley Dean Witter, Goldman, Sachs & Co. and Paine Webber Inc. Additional senior co-managers and co-managers might be selected in the future.

Extraordinary performance by senior co-managers in the marketing of bonds and in the generating of structuring or other financing ideas will be recognized by the designation of a disproportionate share of the management fee.

Appointment of the particular book-running senior managers for issues after the initial bond issuance will reflect the quality of ideas, orders and bond trading performance evidenced at the time by individual firms. The performance of the underwriting team will continue to be evaluated on an ongoing basis. The composition of the underwriting team may be changed at any time based on merit and performance.

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