David Bowie's bonds hit low note

Bowie first issued the bonds in 1997

Bonds issued by rock star David Bowie, which earned him millions of dollars linked to future royalties, have been downgraded by US finance experts.

Moody's Investors Services ruled that $55m (£30.5m) worth of the British star's bonds are only one level above "junk", the lowest rating.

It said the poor rating was because of the downturn in the music industry.

In 1997, Bowie was the first star to sell bonds to fans, awarding them a share in his future royalties.

Effectively, the bonds committed Bowie to repay his new creditors out of future income, along with a fixed annual return.

Falling ratings

Selling the bonds allowed the star - famous for songs such as Space Oddity, Heroes and Changes - to earn money upfront rather than wait for royalties to come in months or years in the future.

But now both a slowdown in the music market and what Moody's called the "downgrade of an entity that provides credit support" to the bond issue has forced the downgrade.

In practical terms, the bonds will fetch a lower price if fans - or anyone else - want to trade them.

Bowie's lead was followed by other music stars, including singer James Brown and soul band The Isley Brothers.

But the Bowie bonds had not been as widely sold as financiers had hoped seven years ago.

Bowie released his latest album, Reality, last year, to much acclaim.

He is playing several festivals in Europe this summer, including the Isle of Wight festival and Scotland's T in the Park.