Trading has been brisk on Brightline West bonds as the West Coast train project continues to work to put together financing anchored by a federal loan and bank-backed equity.
Roughly $37 million of senior bonds with a 12% coupon due in 2065 traded Thursday and Friday for 61.5 on the dollar. That's the lowest price since early June, but an increase from the record low of 50 recorded in April.
The trades come amid a mix of news from the $21 billion train line that has around $2 billion of unrated debt, making it one of the largest 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
Brightline West bondholders in early August agreed to a 40-day extension to give Brightline additional time to secure a $400 million equity contribution that was originally due on March 31. The grace period from Aug.1 to Sept. 10 will give the company more time "to pursue financing for the next phase of capital formation and to conclude contracting efforts, locking in the total cost to deliver the project," according to the
Management is also required to give majority bondholders an updated comprehensive business plan presentation.
Meanwhile, Sarah Watterson, who had served as president for seven years, has stepped down from the role, as first reported by Bloomberg. She remains with the company as a special advisor, according to her LinkedIn page.
In a
Brightline had hoped to hear from the U.S. Department of Transportation by early this year.
Investors view the RRIF loan as crucial to the train line's ability to advance.
The 12% senior secured bonds that have seen recent trading are the result of a
The new senior bonds come due in November 2026 and feature a pledge that they will be paid down first with any cash or grants that the company secures in the course of the year, which so far have failed to materialize.
A chunk of the remaining 9.5% senior subordinate bonds traded at their lowest price to date Wednesday, sinking to 50 cents. That's down from 86 in the most recent round-lot trading last November prior to the debt exchange.
The project features a 218-mile rail service with four stations between Las Vegas, Nevada, and Rancho Cucamonga, Calif. The tracks will operate primarily within the median of the existing I-15 highway corridor. The train was initially set to be operating by the 2028 summer Olympics in Los Angeles, but the timeline has since been pushed to late 2029.
