A recent deferred interest payment has sent bond prices tumbling.
High-speed passenger rail system Brightline’s mid-July decision to defer interest payments on a portion of its debt sent a ripple effect through the high-yield municipal-bond market. Since then, the largest owners of the debt have suffered steep losses.
The episode has been another bump in what has been a rocky year for municipal-bond funds and shows that an asset class often regarded as sleepy can sometimes jolt investors awake.
Brightline’s Background
Brightline Florida, a significant issuer in the high-yield muni market, has evolved since first launching a private passenger US rail service in 2018. Most notably, it launched a 235-mile connecting route between Miami and Orlando in 2023. While the company aspires to extend its services to Tampa, its debt-management challenges have dominated recent headlines. Lower-than-anticipated ridership and revenue have been headwinds.
morningstar.com
by Max Curtin
Aug 1, 2025