Brightline Financials

Bonds "pop": Yahoo!

Bonds for Florida High-Speed Rail Pop in Market ‘Starved’ for High-Yield Munis

(Bloomberg) -- Municipal bonds issued last week for Florida’s private rail operator, Brightline, climbed in the secondary market as investors clamored for new high-yield securities.

Prices on large block trades for the BBB- rated securities issued with a 5.5% coupon rose as high as 105.4 cents on the dollar Tuesday, up from 102.3 cents when they were priced last week. Eager investors drove risk premiums, or the spread over top-rated debt, on the bonds tighter to about 75 basis points from 120 basis points.

Brightline’s Florida route where trains can reach speeds as fast as 125 miles per hour, is the first new US private passenger railroad in the US in more than a century. The railroad issued about $3.2 billion of municipal bonds as part of a debt restructuring and recapitalization last week. With backing from Fortress Investment Group, Brightline is also building a new, faster train line connecting Las Vegas to Southern California.

“Strong investor demand for the Brightline deal highlights just how starved the high-yield market is for big liquid names,” said Dora Lee, director of research at Belle Haven Investments.
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There's always someone out there taking that "below investor grade" paper.

I acknowledge that I have a mutual fund in my portfolio comprised of just that kind of stuff. But I dare not drink too much of that Kool-Aid.

It does need to be noted that Brightline's paper is "stable" at that grade per Fitch (suggesting it was never higher than that, and they aren't downgrading it).

Refinancing: TCPalm

Brightline gets $2.2 billion in bonds, will increase trains from four to seven coaches

Brightline will refinance some of its $4.94 billion debt with $2.2 billion in tax-exempt bonds the Florida Development Finance Corp. issued May 9, which will be due in 2053, according to a 2023 financial report.

Three raters gave Brightline low credit ratings, saying it was a “suitable investment” with a “stable outlook,” but “subject to adverse business and economic conditions.” The preliminary ratings were based on “conservative assumptions” and could change as the credit raters obtain new information, they said.
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Brightline did get screwed by COVID. About a year, if not more, of no trains, and it totally pushed back the Orlando leg by at least a year or two.

https://youtu.be/1k8craCGpgs?feature=shared
So great to associate this song with something other than Tony's whacking.

I know I was skeptical when AAF was first announced, but as one who "goes down" twice yearly, I use it to get "from here to there".

Finally, if you want the photo properly displayed, just tap it.

Its quite an advantage to be able to issue tax-exempt bonds. Mister google says that 30 year mortgages are 7.6%, so 2% higher than what Brightline is paying.

Matthew 8:26:

…The disciples went and woke Him, saying, “Lord, save us! We are perishing!” “You of little faith,” Jesus replied, “why are you so afraid?” Then He got up and rebuked the winds and the sea, and it was perfectly calm. The men were amazed and asked, “What kind of man is this? Even the winds and the sea obey Him!”…

I know that I was "of little faith", for Brightline has clearly become a "commercial success" i.e. there is public acceptance of the product, and at the price level at which it is offered. I only wish that The Late Noel Weaver could be here to see it (he did get a $10 joyride in before he passed).

Now what also astounds me is how the Gannett Treasure Coast Newspapers have "hopped on the train". They were leading the charge of the anti-Brightline movement. Now look at them.

Go down to South East Florida as I do; amongst any circles I'm around, Brightline is a "household name". I can recall a meet up in Miami last January with a Cleveland Orchestra Board Member. She was leaving to go to West Palm, and on Brightline. I said to her "later this afternoon I coming up to go to my favorite Italian restaurant (Il Bellagio on Rosemary St)". She said "on Brightline, of course?". "Yes" which was only a half-truth, as I wanted to ride Tri-Rail out of Maimi Central. Trust me, this gal could have just as easily hired a livery car to take her up there - and probably what she would have done prior to Brightline.

Gilbert B Norman: i was one of the very skeptical persons about Brightline. Actually, thought that their order for rolling stock was too much. I noted how Lossan was doing and thought that Brightline rider potential was somewhat less.

Now we have Siemens in the good position of Amtrak, VIA, and Brightline all wanting their equipment delivered yesterday. Plus, the light rail equipment. 16 departures a day seems like a sweet spot with riders anticipating if delayed getting to station another train will come shortly. We can note how the Surf liner has lost riders due to only a slight decrease in reliability and the various cancellations tanking the number of riders. 4M rider loss is not chump change.

What happens to Brightline riders if some stupid boat damages one of the many bridges closing route for several days? Have to hope Brightline has lined up bus service in that unlikely case or it will loose riders permanently.

Officer/Captain West Point, for the Melbourne incident, they had a busteetoot ready to go. For my February St. Lucie River (Martin County Navy on manuvers) incident, it was "wait it out" for some 90 min, and a shower of vouchers - one was for $75 but only good for three months.