Bondholders for the California-Nevada train line Brightline West this week granted more time and more bond funds as the cash-strapped company struggles to put together a financing package.
The deal, announced Thursday, pushes back a Sept. 10 deadline to secure $400 million of equity to Nov. 2.
The company also disclosed that it expects federal officials to finish due diligence on a key $6 billion loan by late October. A formal "invitation to apply" for the loan would then launch a 90-day review period by the U.S. Department of Transportation's Build America Bureau, the company said in a Sept. 9
Investors consider the $6 billion Railroad Rehabilitation and Improvement Financing Loan key to the project's future. Brightline
The $21 billion train line has around $2.5 billion of unrated debt, making it one of the largest and closely watched credits in the high yield municipal bond market.
Owned by Fortress Investment Group, the West Coast project is a sister to the Brightline Florida rail line that's
The extension marks the fifth amended agreement with bondholders. The additional bond funds will "provide the liquidity to maintain project momentum while the broader financing process continues," the company said in the update.
"Regarding financing, the Build America Bureau remains actively engaged in its review of the project and has conducted diligence across every major aspect of the development. Ridership, legal, technical, and financial advisors have been engaged," Brightline said.
"The company expects to receive an invitation to apply upon completion of the Bureau's diligence review, which the company expects to complete no later than October of this year. The invitation to apply will begin the formal 90-day review period for the RRIF application. The company continues to work closely with the Build America Bureau."
The latest equity deadline of Nov. 2 is also the mandatory tender deadline for the bonds, which replaced $2.5 billion of private activity bonds
Facing an original mandatory tender in November 2025, Brightline instead reached a deal with bondholders for a
The company also told bondholders it has completed all construction contract negotiations, which it said locks in major parts of the budget and schedule.
"Under the executed contracts, the remaining budget to complete the project is approximately $20.9 billion, which includes hard costs, soft costs and contingencies for construction," the company said in the EMMA update.
Mohammed Murad, head of the municipal credit research team at PTAM, which holds Brightline West debt, said the contract update is important from a bondholder's point of view.
"The full execution of the construction contracts provides greater cost certainty and allows the company to focus on the [Build America Bureau] due diligence, an important component of the project's capital stack, as well as the equity capital raise, for which an extension has been granted," Murad said.
The 12% senior bonds traded in late August in the 61.5 cent range.
