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<\/p>\nAlmost all of Brightline’s trains run on time, but worries are mounting that the passenger train service is barreling toward a debt crisis earlier than anticipated just a few months ago.<\/p>\n
Credit ratings agency S&P Global cut its already low grade on some Brightline bonds earlier this month and withdrew its ratings altogether. S&P warned a financial restructuring of Brightline\u2019s borrowing is \u201ca virtual certainty in about six months.\u201d<\/p>\n
The ratings agency last cut its view of Brightline\u2019s IOUs in late December. It predicted a \u201chigher probability of default by January 2027\u201d in its analysis at that time.<\/p>\n
The early March update indicates Brightline\u2019s finances are deteriorating faster than expected just three months earlier.<\/p>\n
The company did not respond to a request for comment.<\/p>\n
We expect a distressed exchange to be a virtual certainty in about six months<\/p>\n
S&P Global<\/p>\n
\u201cBrightline Trains Florida continues to significantly underperform our original expectations,\u201d S&P Managing Director Trevor D\u2019Olier-Lees wrote in his most recent debt rating cut. S&P first downgraded the train service\u2019s debt rating to junk bond status in May 2025. Fellow credit agency Fitch was the first to call Brightline\u2019s borrowing rating junk a few weeks earlier. There have been three additional rounds of downgrades of Brightline\u2019s borrowing rating since.<\/p>\n
Brightline is scheduled to pay $162 million in borrowing payments this year. It skipped an interest payment on one set of bonds earlier this year, marking the second postponed payment. It is allowed to defer three interest payments on these specific bonds before violating its loan terms.<\/p>\n
The debt agencies have been growing more concerned that Brightline has not been successful in getting more passengers to pay higher fares. Ridership between South Florida stations was up 25% in January from a year ago, but the average fare fell 16%.<\/p>\n
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Brightline has yet to release its full year 2025 financial results to its lenders. D\u2019Olier-Lees at S&P expects there will be less money than expected available to Brightline to pay its debts. In December, he expected the company to have $191 million available to it. Now, he estimated Brightline will have $160 million of total liquidity. \u201cThe alarming depletion of the project\u2019s liquidity raises concerns around the quality of information provided,\u201d he wrote. \u201cMoreover, it indicates that the project faces an increased risk of a distressed exchange.\u201d<\/p>\n
The credit warning called that \u201ctantamount to a default.\u201d<\/p>\n
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Brightline requested S&P Global withdraw its credit ratings, which the agency granted. It is not clear what led to the request, though such actions can be taken if there is a disagreement between the credit analysts and a company over ratings criteria.<\/p>\n
S&P warned if it had continued rating Brightline bonds, they were at risk of more downgrades<\/p>\n