1.   After rallying in recent months as the settlement talks progressed, tobacco bonds have sagged.

2.   Even without losses from litigation, tobacco bonds are vulnerable to efforts by anti-smoking advocates to place additional restrictions on smoking.

3.   For years, investors have treated tobacco bonds as though they had lower credit ratings.

4.   Litigation is the biggest risk in owning tobacco bonds these days.

5.   The gap in yield, or spread, between tobacco bonds and Treasuries widened after the agreement was announced.

6.   The gap in yield between tobacco bonds and Treasuries narrowed.

7.   The solution is a tobacco settlement bond, a kind of tax-exempt municipal bond backed entirely by revenue from the settlement.

8.   The unexpected news widened the gap in yield between tobacco bonds and Treasury securities.

9.   Tobacco bonds and stocks have been resilient as the industry has weathered most attacks.

10.   Tobacco bonds, like tobacco stocks, are punished by investors wary of a major industry loss in pending court cases.