David Bowie Reinvents Self, This Time As A Bond Issue

NEW YORK - David Bowie, the angular British rock star, has never been afraid to try something new. His stage persona has metamorphosed from Ziggy Stardust to Aladdin Sane to the Thin White Duke. He has performed with a succession of bands, from the Kon-rads to the King Bees, to the Lower Third, to Tin Machine.

Now Bowie is the first major artist to turn himself into a bond issue - payable over 10 years at 7.9 percent.

The asset-backed bond - the financial instrument that has put $55 million in Bowie's well-tailored pocket - is a device of rapidly growing popularity that has already helped banks turn home-loan payments and credit-card receivables into big chunks of cash. But until now no one dared to think the annual income from former hits such as "Space Oddity" or "Let's Dance" might appeal to gray-suited executives looking for stable bond investments.

The bond bonus for Bowie is $55 million immediately, instead of in installments as the records sell, and more money than record companies were offering. The reliability of the revenue stream to pay off the bondholders enabled Bowie to get a triple-A rating from Moody's and a favorable interest rate. His success could entice other artists with steady royalty payments to go to market, said David Pullman, the 34-year-old senior vice president at Fahnestock & Co. who designed the deal.

Bowie sells an average of 1 million records a year all over the planet, and revenue also is generated from 250 songs turned into sheet music, commercials and background music for elevators and voice mail.

That sales track record was crucial to the bond deal, since the institutional investors were paying for a cut of the income from Bowie's 25 pre-1993 albums and songs. Bowie is expected to sign a new $30 million record deal with EMI for future work not covered by the bonds. Pullman reported the financial equivalent "a line around the block" to buy the bonds.

"It just goes to show you that anything can be securitized," said Craig Moyer, senior fixed-income manager at Meridian Investment

in Valley Forge, Pa.