Brightline, Florida’s privately operated intercity passenger railroad, is reportedly moving closer to a Chapter 11 bankruptcy filing as the company works to restructure part of its debt.
The railroad, which operates a 235-mile route with stops in Orlando, West Palm Beach, Boca Raton, Fort Lauderdale, Aventura, and Miami, could seek bankruptcy protection as soon as this week, according to Bloomberg, which cited people familiar with the discussions.
The proposed restructuring would address roughly $1.1 billion in corporate debt, Bloomberg reported, which ranks below Brightline’s senior municipal obligations within its complex debt structure. Brightline’s operating business would remain outside the bankruptcy proceedings, allowing train service to continue without the appointment of a federal trustee while the company works through its financial obligations.
Bloomberg also reported that Brightline is working on financing that could provide additional funding during a bankruptcy proceeding. The arrangement involves municipal bondholders, including First Eagle Investment Management and Nuveen, as well as bond insurer Assured Guaranty. Assured Guaranty agreed last month to provide at least $350 million in loans.
Brightline has not publicly confirmed that it will file for Chapter 11, and the company’s discussions with hedge funds holding its corporate bonds remain ongoing.