Another payment extension for Brightline Florida

Brightline Florida

Brightline Florida bondholders have agreed to a brief payment delay after the company failed, once again, to make required debt payments on time.

Holders of two tranches of Brightline Florida bonds agreed Friday to a seven-day grace period, according to a July 31 notice posted on the Municipal Securities Rulemaking Board's Electronic Municipal Market Access website.

The week-long postponement was granted by holders of the $1.2 billion of unrated, or AAFOH, tax-exempt bonds and $985 million of "commuter" bonds, which are linked to a separate project that would establish commuter rail rights for three Florida counties.

It's the sixth supplement for the AAFOH bonds and the 15th for the commuter bonds.

The delay pushes the July 15 AAFOH debt payment to Aug. 7, and gives the company until Aug. 6 to make a mandatory redemption on the commuter bonds. The commuter holders also gave the company until Aug. 7 to make an interest payment that was originally due Feb. 15.

Brightline Florida now has until Friday to make the payments, negotiate another extension, or restructure its $5.5 billion of debt. The latest delay follows a week-long extension that bondholders granted in mid-July, which followed previous grace periods.

The grace periods since January have gotten shorter as Brightline Florida apparently continues to negotiate with its creditors in what most in the muni market expect will end in an in- or out-of-court restructuring. If the situation lands in bankruptcy court, it would mark one of the largest in the municipal market's history.

Separately, Brightline West, which is waiting to hear whether it will receive a crucial $6 billion federal loan, told investors it has failed to fund an interest account "sufficient to make any current or future interest payment," according to a July 31 EMMA posting.

DesertXpress Enterprises LLC, which does business as Brightline West and is owned by Fortress Investment Group, aims to own and operate the nation's first privately owned, all-electric high-speed train, running a 218-mile route between Las Vegas and a suburb of Los Angeles. The project carries a price tag of $21.5 billion.

The interest account is for senior subordinate bonds issued in February 2025 through the California Infrastructure and Economic Development Bank with a 9.5% coupon due in 2065.