One of the leading players in the emerging asset-backed securitization class of intellectual property, Robert D'Loren said that his company CAK Universal Credit Corp. is completing work on two new ABS deals that will mark the first securitizations of licensing agreement revenues in the apparel industry.
According to D'Loren one of the deals is for a total of $110 million and the second will be a $25 million securitization.
While he was reluctant to divulge the names of the licensees, he described one as "an American icon" and the other as a household name. He said Calvin Klein is not one of the names but that the name is one of that caliber.
He described the deals as similar in structure to the SESAC future royalties securitization recently placed by CAK, one of the pioneers in developing new intellectual property financial instruments.
He described both deals as off balance sheet financings. D'Loren said he has signed agreements for both transactions and expects to begin preliminary discussions on placing the credits within the next 30 days.
Separately, CAK has in the pipeline a $100 million pooled securitization covering five or six royalty-loan controlled rights agreements. This deal is expected to be completed within the next two months.
D'Loren said the collateral in these deals are loans that are made directly to the owner of the rights to a song or to an artist. Some prominent names are included in the deal including R&B artist Barrett Strong, he said.
Joining in the growth of this sector is Prudential Investors an arm of Prudential Insurance Co.
The company said it has an ownership interest in a new firm Entertainment Finance International that will engage in intellectual property-based financings.
Prudential said that EFI is currently working on a securitization and that Prudential would probably be the sole buyer of the issue. The transaction is expected to close this quarter, but company officials refused to reveal any further details. - Dave Feldheim
