- Railroad’s unrated muni bonds gain about 13% since April
- John Miller fills First Eagle’s muni portfolio with the debt
Bond investors are snapping up the riskiest chunk of Brightline’s debt in a wager on the private railroad as it expands west across Florida.
Investors, drawn by a 12% coupon, have bid up Brightline’s $925 million of unrated-tax exempt bonds so much that they’re valued at about 105 cents on the dollar. They’ve returned some 13% since April, when the Fortress Investment Group-backed company refinanced its debt with nearly $4.5 billion in muni bonds and junk notes.
Among the reasons the unrated debt is appealing to investors: collateral. They’re secured by a lien on current and future assets including design contracts, permits, and rights-of-way that are earmarked for Brightline’s project to stretch its tracks from Orlando to Tampa.
Bloomberg Markets
By Martin Z Braun
October 31, 2024