Virgin Trains USA (formerly Brightline) has closed on $1.75 billion in private activity bonds (PABs) underwritten by Morgan Stanley and purchased by 67 different investors to help fund the company’s expansion from West Palm Beach, on the Florida East Coast Railway, to Orlando. Virgin described the closing as “one of the largest PAB transactions to date.”
With the closing of the sale, Virgin says it has the necessary funds to begin construction for service to Orlando, including 170 miles of new track to an intermodal facility located in the new South Terminal at Orlando International Airport. Construction is expected to begin shortly, with completion slated for 2022.
Construction of the new rail line between West Palm Beach and Orlando “is expected to have a significant economic impact in the State of Florida, including the creation of more than 10,000 jobs, and is anticipated to generate more than $650 million in federal, state and local tax revenue,” Virgin said. “The project is 100% privately financed and represents a total investment of $4 billion.”
“Today is affirmation that our vision for passenger rail holds great promise and highlights a tremendous appetite in the private markets for large-scale transportation and infrastructure projects,” said Wes Edens, co-founder and co-CEOof Fortress Investment Group and Chairman of Virgin Trains USA. “Connecting Miami and Orlando makes tremendous business sense, but even more, it provides a public benefit to the State of Florida, including thousands of jobs that will keep the state economically competitive for decades.”
“We have already seen first-hand the economic benefits our project has delivered in South Florida, from revitalizing downtown Miami to spurring growth in Fort Lauderdale and West Palm Beach,” said Patrick Goddard, Virgin Trains USA President. “This private investment will create a critical infrastructure corridor that is essential to the state’s continued growth and high quality of life. We are revolutionizing train travel and realizing a decades-long vision of operating express passenger rail in the State of Florida.”
“We are proud to be associated with such a transformational project that generates sustainable increased economic activity, reduces traffic congestion and benefits the environment,” said Brian Wynne, Managing Director and Head of Public Finance at Morgan Stanley. “We look forward to working with Virgin Trains USA as it continues to build much-needed infrastructure in the United States.”