27 January 2016

Farewell to David Bowie, Luxembourg securitisation pioneer

Bowie’s Luxembourg securitisation gift

 

The death of David Bowie, without doubt one of the most influential musical and cultural figures of the past one hundred years, has brought with it many fond recollections and anecdotes. However, one aspect of the British cultural icon's past risks being forgotten; he was a financial, as well as an artistic, innovator, as reflected in the fact he was one of the first music artists to set up a securitisation vehicle in Luxembourg.

Bowie's first foray into securitisation vehicles in Luxembourg came with his move to securitise future royalties with what came to be known as "Bowie Bonds"; a term coined by the investment banker David Pullmann. The vehicle was listed on the Luxembourg Stock Exchange in 1997 and enabled Bowie to sell to investors who in turn benefitted from continual interest of 7.9% as well as Bowie's considerable intellectual property wealth.

As with so much Bowie did, he proved to be a real trailblazer. Other artists, including Rod Stewart, James Brown and Iron Maiden would follow suit by securitising royalties in the Grand Duchy. But in a twist that Bowie's one-time mentor would surely enjoy, the impact of Bowie Bonds was even more widely felt; the owners of products as mundane as laundry detergent would soon take Bowie's lead.


Creatrust in Luxembourg

The Creatrust team is specialised in the securitisation of royalties, future income streams and all types of contracts represented by the issuance of securities the value of which is linked to the underlying asset. Securitisation of royalties could be an interesting solution following the Intellectual Property Rights changes recently  announced (Nexus Approach).

 

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