Passenger Trains > FL: BrightLine bonds issued "low credit rating"

TC Palm reports that the most recent offering of bonds from BrightLine have been rated BBB and BBB- by major credit rating agencies. This matters because it affects the interest rates the company will have to pay for new financing.  That said, these new bonds will be used to refinance older bonds at a lower interest rate, saving money.  As BrightLine  gains more months and years of results, the bond rating agencies will consider updating the ratings to reflect changes in their outlook.  Bond raters often like to see several years of consistent results before offering a view.

From the article:  "Though low, the BBB and BBB-minus ratings still mean it’s a “suitable investment” with a “stable outlook,” but is “subject to adverse business and economic conditions,” the three credit raters agreed. The preliminary ratings were based on “conservative assumptions” and could change as the credit raters obtain new information, they said."


Paywall possible
https://www.tcpalm.com/story/news/local/florida/2024/04/22/sp-global-ratings-kbra-fitch-give-low-credit-ratings-brightline-bonds-florida-trains-refinance-debt/73304972007/

Brightline's $2 billion bonds assigned low credit ratings, though the outlook is "stable"

Paywall bypass:

https://archive.ph/H5TSI

Have anything to do with the fact that DeSantis said a couple of weeks ago we are not paying or subsidizing any of this ?

The state of Florida issued a bundle of private purpose bonds for BrightLine. We discussed it here.

The Governor cleared a path to use the I-4 corridor from Orlando to Tampa. He has been helpful.

For what it's worth, I think the Gov tailors what he says to the audience in front of him. Not necessarily consistent with what he said yesterday.

Posted from Android

Lackawanna484 Wrote:
-------------------------------------------------------

> For what it's worth, I think the Gov tailors what
> he says to the audience in front of him. Not
> necessarily consistent with what he said
> yesterday.
>
> Posted from Android

That's pretty much true for any politician.

Yeah, but wasn't the initial investment from Fortress Investment Group at absurdly high interest rates because nobody else would touch them?
They have ot have a ton of debt on the books, and the real estate revenues will take a while to develop.  Meanwhile, you're running a heck
of a lot of trains with some hefty labor costs!

mp51w Wrote:
-------------------------------------------------------
> Yeah, but wasn't the initial investment from
> Fortress Investment Group at absurdly high
> interest rates because nobody else would touch
> them?
> They have ot have a ton of debt on the books, and
> the real estate revenues will take a while to
> develop.  Meanwhile, you're running a heck
> of a lot of trains with some hefty labor costs!

Right. This bond offering will refinance the earlier bonds at a lower interest rate.  Like refinancing your mortgage at a lower interest rate, or transferring a credit card balance for a much lower rate.