By Ellen Welsher, director, new assets group, and James Penrose, legal department, Standard & Poor's Ratings Services

In keeping with the trend of applying structured finance techniques to almost any type of "future flow" transaction, issuers and their advisers have been testing the capital markets' willingness to accept cashflow generated from intellectual property. To date, the markets' acceptance has been somewhat tentative. After the pioneering "Bowie Bond" deal in 1997, there have been other intellectual property-based transactions, but the area has hardly been the runaway success its more enthusiastic proponents once predicted. (This notwithstanding attractive assets with long-lived cash flows, good performance histories, and comfortable risk profiles that could find their way into transactions).

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