Definition of Bowie Bond:
Asset-backed security (ABS) whose underlying collateral consists of an intellectual property right. In this arrangement a copyright owner (such as lyricist or singer) sells bonds which are serviced and redeemed from the revenue generated by the sales his works (such as records). It is named after the UK rock star David Bowie (famous for the classics such Changes, China Girl, Lets Dance) whose 1997 bond issue (underwritten by the Prudential Insurance Co.) was bought by a group of insurance companies for 55 million dollars. He pledged the future royalties from 25 of his pre-1990 albums as collateral.
A Bowie bond was a unique type of asset-backed security which used as collateral the royalty streams from current (at the time) and future album sales and live performances by musician David Bowie.
Bowie bonds are also sometimes known as "Pullman bonds" after David Pullman, the banker who created and sold the first Bowie bonds.
How to use Bowie Bond in a sentence?
- While an interesting concept, this type of artist-backed debt instrument has lost appeal with the rise of online streaming and file sharing.
- Bowie bonds were a type of bond backed by recording artist David Bowie's royalty streams, and marked the first such security backed by a performer's cash flow potential.
- The banker credited with making this happen, David Pullman, has since issued similar securities from other performing artists.
- Bowie used the $55 million raised from the issuance to buy rights to his music from his former manager, which would then in turn generate more royalties to bondholders.
Meaning of Bowie Bond & Bowie Bond Definition