Brightline Trains Florida LLC was hit with another multi-notch downgrade Friday when Kroll Bond Ratings Agency cut the passenger train to CCC-plus from BB and became the third ratings agency to warn of a potential default next year.
The five-notch downgrade affects $2.2 billion of senior, so-called Opco, private-activity bonds. The outlook is negative. The senior debt includes $1.13 billion insured by Assured Guaranty Inc., which Kroll rates AA-plus with a stable outlook.
Fortress-backed Brightline Florida, which operates a 235-mile train between Orlando and Miami that is the nation's only intercity express passenger train, has struggled to build ridership to meet original forecasts or cover debt payments. The company
Kroll's downgrade follows similar actions by
"Under KBRA's current rating case forecast, cash flow from operations in 2026 will be insufficient to meet debt service, resulting in a full depletion of the DSRA and a potential default by January 2027," Kroll said.
Brightline's ridership and revenues improved in 2025 but still failed to reach Kroll's expectations, analysts said, "with annual increases of 12.8% and 14.1%, respectively, compared to forecast growth of 26.3% and 37.5% under our rating case."
The delivery of additional train cars late last year may boost performance in 2026, Kroll said.
"While initial post-expansion results are encouraging, with ridership and ticket revenue outperforming expectations in November and December, the key question is the scale of growth in 2026," Kroll said. "This will be pivotal in determining the project's ability to service its debt obligations without resorting to liquidity reserves in the short term, as well as its ridership ramp-up trajectory at full capacity in the medium term."
Kroll also said it expects operating expenses through 2028 "to increase at an annual average rate above our initial expectations, which could continue to exert pressure on Brightline's financial performance should revenue growth lag current sponsor expectations."
A tranche of the Assured wrapped bonds with a 5.25% coupon due in 2053 sold Monday for 99 cents, about on par with recent months. An uninsured 5.25% bond due in 2047 traded Friday for 69 cents, down from 75 cents on Feb. 5.
The train's struggles over the last year sparked deep drops in bond prices that
In 2024, the company overhauled its complex capital stack in a
The deal lifted much of the company's speculative-rated bonds into the investment-grade category for the first time — a move that some investors said came too soon. A series of downgrades have since pushed the debt back into junk territory.
