Brightline tells bondholders it will be late on interest payment
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.”
