April 7, 2006 – The Health Department, the Charlotte Kimelman Cancer Institute and the Juan F. Luis Hospital Cardiac Center will get a financial shot in the arm thanks to $6.3 million from the Master Tobacco Settlement Agreement of 1999. The bond sale was announced Friday.
According to Larry Soule, vice-president at Banc of America Securities, the Health Department gets $2.2 million, and the cancer and cardiac centers each receive $2 million.
Banc of America Securities was the financial advisor for the bond deal.
According to a press release from Soury Communications, which handles financial public relations for the territory, Citigroup served as the underwriter for the bond sale. The territory's share of the Master Tobacco Settlement is handled by the territory's Tobacco Settlement Financing Corp.
Soule said that Kent Bernier, by virtue of his role overseeing finance at the Public Finance Authority, serves as vice-president. Soule said Gov. Charles Turnbull was the president, with Rosalie Simmonds Ballentine and Jose Penn the other officers. Ballentine said it was wonderful that the money would be available to help improve the territory's health care system.
Soule said the Tobacco Settlement Financing Corp.'s sole purpose is to handle money from the fund and deal with the bond issues.
A territorial law passed in 2001 mandates that all the tobacco fund money that comes to the territory goes to support health care. Soule said that in many states, the tobacco money goes into the general fund rather than to health care or antismoking initiatives.
In the agreement, tobacco companies agreed to pay states and territories so they can fund treatment of smoking related diseases. In return, states and territories agreed not to sue the tobacco companies.
However, that funding could be at risk. According to a "Washington Post" report on March 28, the tobacco companies are losing market share to smaller companies that did not participate in the agreement. This means the participating companies will not have to put as much money into the fund.
Soule said that the territory is not affected because only major brands are sold in the territory.
Soule said the territory's share varies each year based on the amount of tobacco sold across the country. The figures are expected to decline as more people quit smoking.
He said that as part of the settlement, tobacco companies are supposed to mount a campaign to teach people about the dangers of smoking.
This is the second bond sale backed by the tobacco money. The first in 2001, also earmarked for health care, generated $21 million.
Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.