Entertainer Deals in Wings

         Fahnestock & Co.’s securitization unit expects to be ready by the end of March to launch an issue backed by a pool of royalties earned by several musicians, including folk-rockers Crosby, Stills & Nash.

         The deal will be rated by Moody’s and Duff.  The asset-backed securities are expected to earn single-A ratings.

         In addition to the CS&N royalties, the deal will be backed by receivables of another performer and a team of song writers.  The identities of the other artists could not be learned.

         In a separate transaction, Fahnestock plans to securitize royalties from sales of the Rolling Stones’ albums – in a deal also slated to hit the market within the next couple of months.  The upcoming deals are patterned after a much-heralded securitization of royalties from David Bowie’s albums, a $55 million issue that Fahnestock closed in January.

         In preparing for the Bowie deal, bankers had lined up an investor – Prudential Insurance – months in advance.  By contrast, the upcoming issues still aren’t spoken for by investors.

         Also rumored to be in the works: a securitization of royalties from sales of “Jagged Little Pill,” the debut album of singer Alanis Morissette.  However, market participants say the deal is unlikely to be completed because the album’s future revenue stream is to unpredictable.  Although the album has already sold some 25 million copies, it’s uncertain how soon or how quickly its popularity will ebb.

         Meanwhile, there has been some discussion among bankers about securitizing royalties from records that will be released in the future.  In the deal involving David Bowie'’ royalties -–the only music-royalty securitization to date – investors were paid principal and interest based on future revenues generated only from Bowie records that had already been released.

ASSET-BACKED ALERT February 9, 1998 – Page 3