Bowie Bond

DEFINITION of 'Bowie Bond'

An asset-backed security which uses the current and future revenue from albums recorded by musician David Bowie as collateral. The 25 albums a Bowie bond uses as their underlying assets were recorded prior to 1990. David Bowie used the proceeds from the bond sale to purchase old recordings of his music. In creating the bonds, he ultimately forfeited royalties for the life of the bond (10 years).

Bowie bonds are also known as "Pullman bonds" after David Pullman, the banker who created and sold the first Bowie bonds.


Bowie bonds, issued in 1997, had an interest rate of 7.9% and a life of 10 years. The Bowie bonds were purchased by Prudential Insurance for $55 million.

Bowie bonds represented one of the first instances of a bond that used intellectual property as the underlying collateral. The value of the bonds began to decline as online music and file sharing grew in popularity, decreasing album sales. This resulted in a downgrade by Moody's in 2004. However, the advent of legal online music retailers renewed interest in these securities in the latter part of the decade.