Though volume in the ABCP market is down this year, conduits are still absorbing some of the more interesting structures, including a pseudo intellectual property securitization involving non-profit children's development concern Sesame Workshop, creator of the long running kid's television show Sesame Street.

Considering the Enron-spawned scrutiny securitization has faced this year, industry proponents might be wise to allude to this deal. Who could argue against an SPE that scored Big Bird, Elmo, Bert & Ernie and Oscar a cheaper cost of funds? No balance sheet play. No corporate scandal. Just good, clean funds.

The $60 million, unwrapped/ unrated transaction is backed by the royalty stream derived from long-term trademark contracts, such as the licensing fees that toy and apparel companies pay Sesame Workshop for the use of its characters and logos. The deal was structured by Fleet Securities and placed in Fleet's Eagle Funding multi-seller conduit.

Sesame Workshop essentially sold the right-to-collect on the contracts into a bankruptcy remote structure for the seven-year term of the deal. The company used securitization as an alternative to a tax-exempt bond offering. "It was an excellent way for us to finance, as it allowed us to free up our investment portfolio that had been collateralizing our previous facility," said Allan Gaherty, vice president and corporate controller at Sesame Workshop.

Via the securitization, Sesame extinguished a $100 million revolving loan facility the company established with Fleet in late 2000. Sesame was able to pay down $40 million, and converted the remaining balance into the securitization facility, allowing it access to the investment portfolio that had served as collateral for the original loan.

According to industry sources, Sesame Workshop's securitization is similar in nature to other IP trademark-related deals, some of them out of the fashion and apparel industry, such as the Bill Blass leveraged buyout, which CAK Universal Credit Corp. closed in 1999. The most notable deal might be Arby's logo securitization, whereby the corporate entity securitized the revenue associated with the restaurant's 10-gallon hat. The transaction, dubbed a whole company securitization, closed in 2000.

Fleet is no stranger to esoteric and innovative financings. Last year, the firm syndicated a $6 billion loan to Finova Capital Corp. into the ABCP market, utilizing more than a dozen conduits. The loan was extended to Finova by Berkadia, a joint entity formed by Warren Buffet's Berkshire Hathaway and Lucadia National Corp., to aid Finova in its bankruptcy restructuring. This year, Fleet completed a $180 million securitization for the Denver Broncos' new stadium, INVESCO Field at Mile High (see ASR 2/18). Previously, Fleet financed the Philadelphia Eagles' new stadium in its conduit.

Currently, the firm is closing the latest securitization incarnation for DreamWorks SKG, a structure roughly $1 billion in size, co-managed by JPMorgan Securities, and wrapped by Ambac.

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