The Bonds They Are A Changin'

Goldman Sachs recently pulled its Dylan bonds from the market. Goldman had originally expected to sell $300 million worth of the bonds, backed by the royalties received from songs written by Bob Dylan. The bonds were expected to be issued with a BBB- rating, but Goldman pulled the bonds to separate the cash flows into two classes, or "tranches". The senior tranche will carry a higher credit rating, while the subordinated, or junior, tranche will have a lower credit rating and bear more default risk than the senior tranche.