Fitch Takes Various Actions on New York Counties Tobacco Trust V Series 2005

NEW YORK--(Business Wire)--
Fitch Ratings upgrades two classes of capital appreciation bonds from New York
Counties Tobacco Trust V Series 2005, as follows:

--2005 S1 affirmed at 'BBB', Stable Outlook;

--2005 S2 upgraded to 'BBB' from 'BBB-', Stable Outlook;

--2005 S3 upgraded to 'BBB-' from 'BB', Positive Outlook.

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.

The 2005 S1 capital appreciation bond (CAB) is being affirmed at 'BBB' with a
Stable Outlook while the 2005 S2 is being upgraded from 'BBB-' to 'BBB' with a
Stable Outlook. Although the model output indicated a notch above these ratings
on the CABs, Fitch accounted for the uncertainty associated with the long term
horizon of these bonds. The 2005 S3 CAB is being upgraded from 'BB' to 'BBB-'
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.

New York Counties Tobacco Trust V 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, 212-908-0867
Cynthia Ullrich, 212-908-0609
Stefanie Leung, 212-980-0826
or
Media Relations:
Sandro Scenga, 212-908-0278
Email: sandro.scenga@fitchratings.com

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