Bowie Banker Issues Bonds For Motown Songwriters

By Sue Zeidler

LOS ANGELES (Reuters) - The investment bank that organized last year's $55 million bond issue for David Bowie has signed a similar deal with the legendary Motown songwriting trio Holland-Dozier-Holland, sources said early Wednesday.

The Pullman Group, a division of Fahnestock & Co, has signed a finance securitization agreement valued at about $30 million for songwriting royalties accruing to Edward Holland, Lamont Dozier and Brian Holland.

The trio's entire catalog, which includes songs performed by such acts as the Supremes, the Four Tops and Marvin Gaye, is valued at about $100 million.

The royalty income derived from such tunes as the Supremes' "Stop In The Name of Love," the Four Tops' "Baby I Need Your Loving" and Marvin Gaye's "How Sweet It Is To Be Loved By You," among others, will form the financial basis of the bonds.

Since Bowie raised $55 million last year with bonds backed by the anticipated flow of royalties from his first 25 albums, Pullman has talked with stars from Pavarotti to the Rolling Stones about similar deals. He was unavailable for comment on the new deal.

While issuing bonds for rock stars sounds exotic, Pullman has said there was little difference between these bonds and more common types of asset-backed securities, like those backed by auto loan payments or credit card receivables.

The key to any asset-backed deal is predictable cash flow, Pullman said in a recent interview, and any star that has consistently sold millions of records, tapes or compact discs annually over decades is a prime candidate.

Artists like the concept because it enables their heirs to pay estate taxes without liquidating inherited assets and gives artists cash to invest and diversify.

Reuters/Variety April 8, 1998