Fitch Affirms California County TSA's (Los Angeles County) Series 2006

NEW YORK--(Business Wire)--
Fitch Ratings affirms seven classes of tobacco settlement asset-backed bonds
from California County Tobacco Securitization Agency (Los Angeles County Tobacco
Asset Securitization Authority) series 2006, as follows:

2006A Senior Convertible Capital Appreciation Turbo Term Bonds

--$69,743,134 due June 1, 2021 at 'BBB+'; Outlook Stable;

--$53,944,662 due June 1, 2028 at 'BBB+'; Outlook Stable;

--$72,654,379 due June 1, 2036 at 'BBB+'; Outlook Stable;

--$62,180,171 due June 1, 2041 at 'BBB+'; Outlook Stable;

--$84,524,254 due June 1, 2046 at 'BBB+'; Outlook Stable.

Capital Appreciation Bonds

--2006B at 'BBB'; Outlook Stable;

--2006C at 'BB+'; Outlook Positive.

The affirmations are based on the level of stress each class is able to
withstand as indicated by Fitch's new breakeven cash flow model. The model
indicates, for each class of bonds, the level of the annual Master Settlement
Agreement (MSA) payment percent change the trust would be able to sustain and
still pay the bond in full by the legal final date. The base case 'B'
corresponds to a 1% increase in the MSA payment received by the trust every
year. The 'BBB' category corresponds to an annual MSA payment decline of 1.25%.
The cash flow model accounts for the amount of the latest reported MSA payment
that the transaction has received, the capital structure, the reserve account,
and the bonds' legal final dates.

The bond payments are also tied to the tobacco companies making MSA payments.
Tobacco settlement bonds can be rated up to 'BBB+' based on Fitch's view of the
whole tobacco industry and the executory nature of the MSA. In the event of a
bankruptcy of a tobacco company, Fitch believes there is an incentive for the
company to continue to make payments under the MSA.

Although the delinked rating of the 2021 turbo bond suggested by the model is
'A-', the bond is being affirmed at the cap rating of 'BBB+' with a Stable
Outlook. The 2028 through 2046 turbo bonds are being affirmed at 'BBB+' with a
Stable Outlook which is consistent with the model output. The 2006B capital
appreciation bond (CAB) is being affirmed at 'BBB' with a Stable Outlook which
is consistent with the model output. The 2006C CAB is being affirmed at 'BB+'
and assigned a Positive Outlook because a relatively stable MSA cash flow in the
future is likely to lead to an upgrade of the ratings.

California County Tobacco Securitization Agency (Los Angeles County Tobacco
Asset Securitization Authority) bonds are secured by the pledged payments made
under the MSA. The pledged payments consist of California's share of perpetual
annual payments and strategic contribution payments by the original
participating manufacturers (OPMs) and subsequent participating manufacturers
(SPMs). The OPMs at the time of the original agreement were Philip Morris USA,
Inc.; R.J. Reynolds Tobacco Company; Brown & Williamson Tobacco Corporation; and
Lorillard Tobacco Company. The amount of annual MSA payments received by the
trust are mainly affected by the tobacco consumption level and inflation rate,
as well as state specific adjustments, as specified in the MSA

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, 'www.fitchratings.com'. Published ratings, criteria
and methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Aoto Kenmochi, +1-212-908-0867
Cynthia Ullrich, +1-212-908-0609
Stefanie Leung, +1-212-980-0826
Sandro Scenga, +1-212-908-0278 (Media Relations)
sandro.scenga@fitchratings.com

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