In the largest deal of its kind, Fahnestock & Co., the creator of the so-called Bowie Bonds, has inked venerable songwriting trio and Motown sound architects Holland/Dozier/Holland to a pact valued at $100 million, according to sources.
The company also has refashioned its moniker and tapped music publishing industry vet Billy Meshel to help guide its West Coast efforts.
The new moniker, Pullman Structured Asset Sales Group (nicknamed the Pullman Group), is named after Fahnestock & Co. managing director David Pullman. The change is designed to help the company be more easily recognized in the music, film and TV industries, where it has pioneered asset-backed lending and sales of securities based on intellectual property.
Songscribes Edward and Brian Holland and Lamont Dozier have authored dozens of hits for artists as diverse as Barbra Streisand and Steve Winwood, but they are best known as the authors of many of the songs that comprised the Motown Sound.
The royalty income derived from such tunes as the Supremes’ “Stop In The Name of Love,” the Four Tops’ “Baby I Need Your Loving” and Marvin Gaye’s “How Sweet It Is To Be Loved By You,” among others, will form the financial basis of the bonds.
The deal, which had been in the works for several months, closed Monday.
The tunes generate millions of dollars annually in fees from use in film and TV, radio play, compilation records and music publishing royalties.
The tapping of 30-year music publishing industry vet Meshel, the former chief of All Nations Music (which he sold to MCA Music Publishing last year) and the founder of Arista/BMG Music Publishing’s operation, will give the New York-based Pullman Group a set of eyes and ears on the West Coast.
Meshel, a widely recognized expert in evaluating music publishing assets and a man with solid links throughout the industry, will continue as chairman/CEO of Music & Media Intl., the firm he bowed last year after the All Nations sale.
Pullman is the architect of the groundbreaking 1997 deal that packaged and sold $55 million in securities backed by the anticipated royalties of entertainer David Bowie.
The pact — the industry’s first –was secured by the cash flow derived from Bowie’s music publishing royalties and copyrights and record masters ownership.
It has since become the model for other firms that have entered the entertainment industry-related, asset-backed dealmaking fray.
The pacts are the latest wrinkle in a growing $150 billion, nine-year-old business, in which entertainment industry assets comprise a small fraction.
With the name change, Fahnestock hopes to create a brand-name financial product, identified as “Pullman Bonds.” Pullman is also looking at tapping film libraries, book author’s royalties and TV syndication fees for such deals.
The HDH/Pullman bonds are expected to be Single A-rated from two nationally recognized rating firms, Moody and Duff & Phelps, an aspect that differentiates Pullman from other firms trading in asset-backed loans.