Fitch Takes Various Actions on Suffolk Tobacco Asset Securitization Corporation, Series 2008

NEW YORK--(Business Wire)--
Fitch Ratings affirms ten and downgrades three classes from Suffolk Tobacco
Asset Securitization Corporation, tobacco settlement asset-backed bonds, series
2008, as follows:

Current Interest Serial Bonds

--$1,190,000 series 2008A due June 1, 2010 affirmed at 'BBB+'; Outlook Stable;

--$1,315,000 series 2008A due June 1, 2011 affirmed at 'BBB+'; Outlook Stable;

--$1,445,000 series 2008A due June 1, 2012 affirmed at 'BBB+' Outlook Stable;

--$285,000 series 2008A due June 1, 2013 affirmed at 'BBB+'; Outlook Stable;

--$445,000 series 2008A due June 1, 2014 affirmed at 'BBB+'; Outlook Stable;

--$610,000 series 2008A due June 1, 2015 affirmed at 'BBB+'; Outlook Stable;

--$815,000 series 2008A due June 1, 2016 affirmed at 'BBB+'; Outlook Stable;

--$840,000 series 2008A due June 1, 2017 affirmed at 'BBB+'; Outlook Stable;

--$2,820,000 series 2008A due June 1, 2018 affirmed at 'BBB+'; Outlook Stable;

Current Interest Turbo Term Bonds

--$40,045,000 series 2008B due June 1, 2028 affirmed at 'BBB+'; Outlook Stable;

--$62,295,000 series 2008B due June 1, 2048 downgraded to 'BBB' from 'BBB+';
Outlook Negative;

Convertible Capital Appreciation Turbo Term Bonds

--$107,671,780.60 series 2008C due June 1, 2044 downgraded to 'BBB' from 'BBB+';
Outlook Negative;

Convertible Capital Appreciation Turbo Term Bonds

--$13,375,082.10 series 2008D due June 1, 2048 downgraded to 'BB+' from 'BBB-';
Outlook Negative.

The various actions 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 ratings of the 2008A bonds suggested by the model are 'A'
or higher, the bonds are being affirmed at the cap rating of 'BBB+' with Stable
Outlooks. The 2008B bond due on 2028 is being affirmed at 'BBB+' with a Stable
Outlook which is consistent with the model output. The 2008B bond due on 2048,
the 2008C bond, and the 2008D bond are downgraded to 'BBB', 'BBB', and 'BB+',
respectively; however, the model output suggests that these bonds are under
pressure with breakeven levels indicative of lower ratings. Therefore the bonds
are being assigned a Negative Outlook because of the possibility of the bonds
being downgraded depending on the amount of the future MSA payments received by
the trust.

Suffolk Tobacco Asset Securitization Corporation, tobacco settlement
asset-backed bonds, series 2008 bonds are secured by the pledged payments made
under the MSA. The pledged payments consist of New York'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, +1-212-908-0826
Sandro Scenga, +1-212-908-0278 (Media Relations)
sandro.scenga@fitchratings.com

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