Bowie Bond

Extracted Attributes

• Collateral

  25 albums (287 songs) recorded before 1990

• Face Value

  $1,000 USD

• Asset Class

  Asset-backed security (Celebrity bond)

• Credit Rating

  A3 (Moody's)

• Interest Rate

  7.9%

• Maturity Term

  10 years

• Total Issuance Value

  $55 million USD

Timeline

• The Bowie Bonds are issued, raising $55 million for David Bowie by securitizing his back catalog of 25 albums. (Source: Wikipedia)

  1997-01-01

• The bonds reach maturity and liquidate without default, with royalty rights reverting to David Bowie. (Source: Wikipedia)

  2007-01-01

• Chamath Palihapitiya compares the public listing of Trump Media & Technology Group to a modern-day Bowie Bond on the All-In Podcast. (Source: All-In Podcast E172)

  2024-03-29

Celebrity bond

A celebrity bond is commercial debt security issued by a holder of fame-based intellectual property rights to receive money upfront from investors on behalf of the bond issuer and their celebrity clients in exchange for assigning investors the right to collect future royalty monies to the works covered by the intellectual property rights listed in the bond. Typically backed by music properties, the investment vehicle was pioneered in 1997 by rock and roll investment banker David Pullman through his $55 million David Bowie bond deal.

Web Search Results

• Celebrity bond

  Bowie Bonds are asset-backed securities of current and future revenues of the 25 albums (287 songs) that David Bowie recorded before 1990. Bowie Bonds were pioneered in 1997 by rock and roll investment banker David Pullman. Issued in 1997, the bonds were bought for US$55 million by the Prudential Insurance Company of America, or about $108 million in today's dollars. The bonds paid an interest rate of 7.9% and had an average life of ten years, a higher rate of return than a 10-year Treasury [...] The Bowie Bond issuance was perhaps the first instance of intellectual property rights securitization, a financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling said consolidated debt as bonds "Bond (finance)"), pass-through securities, or Collateralized mortgage obligation (CMOs), to various investors. The securitization of the collections of other artists, such as James Brown, [...] Bowie bonds liquidated in 2007 as originally planned, without default, and the rights to the income from the songs reverted to Bowie.

• Music isn't just art - It's capital

  ### FAQs ## Bowie Bonds are securities backed by future royalties from David Bowie’s music catalog. Investors receive regular payments from these royalties, while the artist gains immediate liquidity without losing ownership. ## These assets offer stable, decorrelated returns and predictable cash flows, especially with the rise of streaming platforms, making them attractive in a low-yield environment. ## [...] Bowie Bonds marked a turning point in 1997, when David Bowie and the banker, David Pullman, transformed music royalties into tradable securities. The deal raised USD 55 million, secured by royalties from 25 albums, and offered investors a steady 7.9% yield. This innovation not only gave Bowie liquidity but also introduced a new asset class that bridged creativity and finance. Today, streaming has made royalty flows more predictable, fueling investor appetite for decorrelated returns. [...] The concept didn’t just benefit David Bowie – it also offered an attractive opportunity for investors. The Bowie Bonds, with a face value of USD 1,000 and a 10-year maturity, paid an interest rate of 7.9%, notably higher than the 6.37% yield on a 10-year U.S. Treasury note at the time. Rated A3 by Moody’s (equivalent to A– by Fitch and S&P), the investment-grade bonds provided investors with a steady, long-term return and, symbolically, the chance to own a piece of their favorite rock star’s

• Understanding Bowie Bonds: Definition, Mechanics, and ...

  A Bowie bond was a unique type of asset-backed security, first issued in 1997, backed by David Bowie's music royalties. These bonds were the first of their kind, using intellectual property as an underlying asset. David Bowie used the money raised from the bond issuance to buy the rights to his music and generate returns for the bondholders. Bowie bonds, also called "Pullman bonds," are named after David Pullman, the banker who created and sold the first of these bonds. ### Key Takeaways [...] Bowie bonds, when issued, had a face value of $1,000, an interest rate of 7.9%, and a maturity of 10 years. They were also self-liquidating bonds, that is, the principal declined each year. Bowie bonds represented one of the first instances of a bond that used intellectual property as the underlying collateral. The bonds were appealing to investors because they presented what was, at the time, viewed as a steady, long-term investment. Also, the bonds were purchased by investors who seized the [...] Bowie bonds were first issued in 1997 when David Bowie partnered with Prudential Insurance Company and raised $55 million by promising investors income generated by his back catalog of 25 albums. The 25 albums, which were used as the underlying assets for Bowie bonds, were recorded prior to 1990 and included classics such as The Man Who Sold The World, Ziggy Stardust, and Heroes. David Bowie used the proceeds from the bond sale to purchase old recordings of his music owned by his former

• Your Favorite Songs Are Wall Street's Latest Investment

  David Bowie launched what became the eponymous “Bowie Bond” in 1997 along with his financial manager Bill Zysblat, celebrated by a credulous press as a market “innovation.” The bonds were meant to extract investment returns from the singer’s back catalogue by way of securitizing future royalties at a healthy rate of 7.9 percent annually. [...] The initial shock one gets from the concept of a Bowie bond should fade quickly — not because the notion isn’t disconcerting, but because it’s ultimately mundane. A bond is a loan with a rate of return and principal repayment date; a Bowie bond is merely a securitized bond backed by an asset — which in this case simply happens to be a music catalogue that yields royalties. It could just as easily have been mortgages or consumer debt or the economic reputation of a sovereign state or god knows [...] The growing popularity of the “Bowie” bond — a security backed by royalties — may sound strange, but it’s nothing new. In treating songs like annuities, capitalists prove once again that nothing is too sacred, or silly, to be commodified.

• Securitizing Stardust: The Legal Life of Bowie Bonds

  At the heart of the Bowie Bond was a relatively simple structure with complex implications. Bowie transferred his future royalty income to a Special Purpose Vehicle (SPV), which in turn was used to issue the bonds in question. Those bonds were secured by the royalties from his music catalog, and investors received fixed returns over a ten-year term. Bowie gained $55 million in liquid capital without selling his copyrights, effectively monetizing his future creative income in the present. This [...] Far from simply a clever way for a musician to cash in on his catalog, Bowie Bonds represent a milestone in the finance, legal, and music industries. By translating future royalty streams into bona fide securities, these transactions demonstrate that intellectual property can serve not only as a means of cultural expression but also as innovative investment opportunities. As private equity firms and institutional investors pour billions into music catalogs, Bowie’s experiment stands as both a [...] TRENT ANDERSON—In 1997, David Bowie made waves in both the music and finance worlds by transforming his back catalog into a $55 million financial instrument. The first of what became known as “Bowie Bonds,” this deal allowed him to raise immediate cash by securitizing future royalties from twenty-five of his albums. Consistent with Bowie’s persona, such an eccentric transaction was a surprising but brilliant crossover between art and Wall Street.