Brightline, the high-speed railroad that runs between South and Central Florida, will be late with a scheduled July 15 interest payment to investors who hold tax-exempt bonds that were issued last year, the company confirmed Friday.

The unrated bonds, which command 10% and 12% interest rates, were sold through the Florida Development Finance Corp., which reportedly is about to consider another $400 million borrowing for Brightline to expand to Tampa from Orlando.

Bloomberg was the first to report the decision to delay the interest payout.

The deferral does not constitute a default, an event that would occur if the rail line missed three interest payments in a row, according to bond documents.

In a statement forwarded to the South Florida Sun Sentinel after the close of business Friday, the railroad acknowledged the decision to delay the payment, and said it was allowed under the terms of the bond issue. But the delay will come at a cost.

“As a result, annual interest due will increase by a step-up rate of 2.00%,” the statement said. “Following July 15, 2025, we intend to make the deferred interest payment with operating cash flow or proceeds from equity and debt financings that we are actively pursuing.”

Ratings agencies Fitch and S&P Global downgraded several Brightline bond issues earlier this year, citing rising costs and lowered reserves.

Brightline, which started service in 2018 in South Florida and now carries passengers over a 235-mile rail line between Miami and Orlando, has been piling up significant financial losses despite steady gains in ridership. Besides the two end-point cities, the privately owned company serves Aventura, Fort Lauderdale, Boca Raton and West Palm Beach.

First-quarter passenger figures this year increased to nearly 800,000 versus 720,000 in 2024. Quarterly revenues were up 11.6% to $54.6 million.

The net loss for the period was $60 million, down from $116 million in 2024, a year that ended with a total net loss of close to $550 million.

First-quarter ridership a mixed bag

Brightline’s strategy of buttressing long-distance ridership to and from Orlando continues to pay dividends. Figures for the first quarter exceeded 26%. But rider figures were off by nearly 8%, according to a company report.

The short-haul outcome is a result of pulling capacity from South Florida to focus on Orlando, a move that raised commuter fares.

In reports this past spring, the ratings firms expressed concern that Brightline’s average fares — which rose more than a dollar year over year in the first quarter to just over $56 — aren’t high enough to help cover its operating and expansion expenses.