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Authorized by the Legislature and signed into law by Governor Gary Locke on April 4, 2002, the Authority makes decisions relating to the sale of $450 million in bonds from the state's tobacco settlement funds. Washington is one of the many states receiving annual payments from tobacco manufacturers from the 1998 settlement of the national tobacco litigation.



  • Kim Herman, Executive Director
  • Paul Edwards, Deputy Director
  • Bob Cook, Senior Director of Finance
  • Carol Johnson, Affiliates Manager
  • Cody Field, Program Assistant

Finance Team

  • Pacifica Law Group, General and Co-Bond Counsel
  • Hawkins, Delafield & Wood LLP, Co-Bond Counsel
  • Nixon Peabody LLP, Disclosure Counsel
  • US Bank, Bank Trustee
  • Public Financial Management, Financial Advisor
  • John Ryan, Assistant Attorney General, Senior Counsel


  • Bank of America Merrill Lynch, Co-Manager
  • Barclays Capital, Book Running Senior Manager
  • Citigroup Global Markets, Co-Senior Manager
  • J.P Morgan Securities, Co-Manager
  • Keybanc Capital Markets, Inc., Co-Manager
  • RBC Capital Markets, LLC, Co-Manager
  • Raymond James & Associates, Inc., C0-Manager


Senate Bill 6828, passed as part of the state of Washington’s 2001-2003 biennial budget, established the Tobacco Settlement Authority (“TSA”) to which the state sold a portion of the state's tobacco settlement revenues due under the national tobacco litigation settlement agreement. The state sold a portion of its revenues to the TSA in order to receive an up-front, lump sum amount of $450 million. The TSA funded the purchase of the revenue stream from the state by “securitizing” the revenues with a bond sale. Securitization is a common financial transaction by which a stream of future revenue is sold or assigned to a third party, in exchange for a cash payment. At least 24 other states and local governments have generated revenue by securitizing all or a portion of their tobacco revenues.

Washington is one of the many states receiving annual payments from tobacco manufacturers from the 1998 settlement of the national tobacco litigation. Washington Attorney General Christine Gregoire served as the lead negotiator for states in the settlement of state lawsuits against the tobacco industry. The state is scheduled to receive these payments in perpetuity, but the TSA will receive a portion of the payments only as long as its Series 2001A bonds (or any related refunding bonds) remaining outstanding.

In addition to generating revenue for the state, tobacco securitization transferred a portion of the risk associated with the possible decline in the future revenue stream (as a result of a decline in tobacco sales or bankruptcy of tobacco manufacturers, for example) from the state to the Tobacco Settlement Authority and, in turn, to the investors who purchased the TSA’s bonds.

Payment on the TSA’s bonds is an obligation only of the Tobacco Settlement Authority and not an obligation of the state of Washington. Neither the faith and credit nor the taxing power of the state of Washington or any municipal corporation, subdivision or agency of the state is pledged to the payment of the bonds.

Administrative and technical support for the Authority is provided by the Washington State Housing Finance Commission, which is reimbursed for its ongoing costs from the revenue stream purchased from the state. Accounting and staff services will be provided until the TSA’s bonds are no longer outstanding.

modified 05/30/2014


Washington State Tobacco Settlement Authority
1000 Second Avenue, Suite 2700, Seattle, WA 98104
Tel 206.464.7139  |  fax 206.587.5113
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