Rock'n'Roll Is Here to Pay

As an orange haired, androgynous icon of the 1970s and'80s, singer-songwriter David Bowie proved himself one of rock's more adaptable creatures. Now 50, the creator of such best-selling albums as The Rise and Fall of Ziggy Stardust and The Spiders from Mars has become the first entertainer of any stripe to "securitize" himself. Last month staid insurance companies turned into rock-bond groupies, excitedly buying up $55 million of so-called Bowie Bonds privately placed by Fahnestock & Co., a New York City investment firm.

The 7.9%, 10-year average-life bonds sport a single-A Moody's rating (they liked the beat?) and are backed by future royalties from 25 albums that Bowie recorded before 1990. According to David Pullman, the Fahnestock managing director who put together the deal, Bowie still sells more than 1 million albums a year.

In effect, the bond sale allows Bowie, who reportedly is worth more than $100 million, to collect his royalties up front. And by using some of the proceeds to buy out a former manager, Bowie will gain total control of his music - a rarity for an artist. With advantages like that, can Frank Sinatra Securities or Stephen King Coupons be far off?

Time Magazine – February 17, 1997 (page 70)