Sears Finds Security

Rock star David Bowie successfully raised $55 million a decade ago by securitizing revenue from his past albums. And just as the underground glam rocker has, over time, grown into a respectable mainstream celebrity, so has his money-raising strategy. Among those who buy and sell “esoteric” asset-backed securities, several recent billion-dollar-plus deals have made IPbacked bonds attractive to even the biggest financial players.

The lawyer who created the Bowie Bonds in 1997 had a hand in the largest recent deal: Richard Rudder, a New Yorkbased partner at Baker & McKenzie. The deal, for Sears Holding Corporation, transferred ownership of three of Sears’s top brands, Kenmore, Craftsman, and DieHard, to a special purpose vehicle called KCD Holdings, LLC. Because it’s a private transaction, Rudder can’t discuss the details, or the other firms involved. But he does point out why he was hired. “I think at Baker we’ve probably done more [IP securitization] deals than anyone else in the country,” he says.