UPDATE 4: Morgan Stanley Prices Brightline Florida’s $770M Nonrated Issuance; Put Date Price Increases to 106 from 105

UPDATE 4: 2:35 p.m. ET 9/27/2023:

Today, Wednesday, Sept. 27, Morgan Stanley priced the $770 million in AMT, nonrated bonds with a final maturity on July 1, 2057 for the Brightline Florida Passenger Rail Expansion Project, according to market sources. Delivery is firm for Tuesday, Oct. 3.

Final terms of the deal are detailed below, with the pricing at the mandatory tender date increasing to 106 from 105:

• 8% coupon at 99 cents on the dollar;


• Optional call from Nov. 1, 2023, to 30 at par;


• Optional call from Dec. 1 to 31 at 102;


• Optional call 103 from Jan. 1 to 31, 2024, at 103;


• Optional call 104 from Feb. 1 to 28 at 104; and


• From March 1 through mandatory put date of April 1 at 106.

Morgan Stanley did not immediately respond to a request for comment

--Hoa P. Nguyen

 

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UPDATE 3: Brightline Florida’s $770M Nonrated Series 2023C Issue Talked at 8% Coupon With 99 OID; Scheduled to Price on Tuesday, Sept. 26

UPDATE 3: 12:57 p.m. ET 9/21/2023: Morgan Stanley expects to price the Florida Development Finance Corp.’s $770 million in AMT, nonrated bonds for the Brightline Florida Passenger Rail Expansion Project on Tuesday, Sept. 26, according to market sources. Preliminary terms of the deal structure are as follows:

• 8% coupon with a 99 OID;


• Optional call from Nov. 1, 2023, to 30 at par;


• Optional call from Dec. 1 to 31 at 102;


• Optional call 103 from Jan. 1 to 31, 2024, at 103;


• Optional call 104 from Feb. 1 to 28 at 104; and


• From March 1 through mandatory put date of April 1 at 105.

Morgan Stanley did not immediately respond to a request for comment.

--Hoa P. Nguyen

 

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UPDATE 2: Brightline Addresses Legal Proceedings in New Supplement to $770M Deal; Reports Aug. Revenue and Ridership

Relevant Documents:
PLOM Supplement

UPDATE 2: 10:42 a.m. ET 9/20/2023: In response to the $750 million lawsuit against Brightline Holdings and Morgan Stanley, Brightline Holdings “believes that the claims are without merit,” posted in a supplement to the preliminary offering memorandum, or PLOM, today.

Brightline also disclosed that it is “reviewing and developing options” for two new train stations: a station in Brevard County, and a station along Treasure Coast, north of West Palm Beach. It hopes to tap into the “growing space tourism” and cruise industries near Port Canaveral, according to the supplement.

Brightline also reported 149,821 passengers during the month of August, a 50% increase over August 2022. It generated $4 million in revenue for the month, a 65% increase from August 2022, according to the supplement.

Further details on revenue and ridership reports are included in the following chart:

--Marvis Gutierrez

 

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UPDATE 1: Brightline Florida Holdings Expects to Price $770M Remarketing Issue Week of Sept. 25

UPDATE 1: 5:40 p.m. ET 9/19/2023:

Brightline Florida Holdings LLC is looking to price the $770 million issuance of Series 2023C bonds to refi 2022 debt next week, the week of Sept. 25, according to market sources. Brightline Florida will be pursing additional refinancing after they close this transaction. The Series 2023C bonds are subject to the alternative minimum tax and have a one-year put date in August 2024, sources add.

Deal manager Morgan Stanley declined to comment.

--Hoa P. Nguyen

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Original Story 3:32 p.m. UTC on Sep. 18, 2023

Brightline Florida to Refi $770M for Series 2022A Tender Offer

Relevant Documents:
Preliminary OM
Florida Development Finance Corp. August Meeting

The Florida Development Finance Corp. is issuing $770 million tax-exempt Series 2023C bonds on behalf of the Brightline Florida Holdings LLC to refinance outstanding debt, including remarketing its Series 2022A bonds. The Series 2023C bonds are part of a $3.6 billion refinancing plan from Brightline, as reported.

The Series 2023C bonds are unrated, according to the preliminary offering memorandum, or PLOM. Morgan Stanley and Jefferies will be co-managers to the deal, while Greenberg Traurig will be bond counsel to the obligor. A pricing timeline for the deal has not been announced.

The deal structure is below:

Bond proceeds will finance a tender of outstanding $801 million Series 2022A bonds and fund capitalized interest and costs of issuance. Holders of the Series 2022A bonds will receive a tender price of 104%, according to the PLOM.

On Aug. 21, Brightline’s $770 million 7.25% Series 2022A revenue bonds due July 1, 2057, which are subject to the tender offer, traded with $4.5 million in volume at a price of 101.25, according to secondary trading data on EMMA. Brightline issued the bonds at a price of 98% to yield 9.18% in August 2022.

As part of the financing plan, Brightline expects an additional $600 million of equity invested into the company, according to the road show.

The Series 2023C bonds are secured by a pledge of equity from Brightline, the project owner, as well as a first lien on all commuter access rights for Miami-Dade, Broward and Palm Beach counties. The commuter access collateral has a $1.9 billion appraised value, according to the road show. There are no covenants on debt service coverage or days cash on hand securing the debt, according to the PLOM.

The chart below shows the cash flow structure:

Brightline also borrowed $215 million of Series 2023A bonds on March 7, 2023, as reported. The 2023C debt is secured on a parity basis with the same collateral as the 2023A bonds, according to the PLOM.

As part of Brightline’s financing plan, the borrower is expected to sell a limited public offering of unrated subordinate Series 2023B bonds, according to a PFM Financial Advisors report presented to the issuer on Aug. 2.

--Marvis Gutierrez