Transit Briefs: Brightline, Capital Line South LRT, GCRTA
Written by Marybeth Luczak, Executive Editor
Brightline covers 235 miles between Miami and Orlando. It launched the first phase of its South Florida operations in 2018, connecting Miami, Fort Lauderdale and West Palm Beach. Stations in Boca Raton and Aventura opened in 2022. Construction of its 170-mile, $6 billion phase two extension from West Palm Beach to Orlando began in 2019 and service launched in September 2023. (Brightline Photograph)
Brightline, Florida’s private-sector passenger railroad, receives “investment-grade” ratings. Also, the city of Edmonton, Alberta, has selected its preferred bidder to design and build Phase 1 of the Capital Line South LRT Extension; and Greater Cleveland Regional Transit Authority (GCRTA) launches a new webpage for its Railcar Replacement Program.
Brightline
Bloomberg on April 3 reported that Fortress Investment Group-backed Brightline has “obtained investment-grade ratings on its proposed senior municipal bonds ahead of a planned $3.6 billion debt refinancing.” According to the media outlet, S&P Global Ratings has assigned a “preliminary BBB- rating, its lowest investment grade, to $2 billion of tax-exempt Brightline bonds.” The Florida Development Finance Corporation, it said, is expected to issue the bonds in April, and Brightline anticipates that Assured Guaranty will “insure $1 billion of the tax-exempt debt.”
Brightline covers 235 miles between Miami and Orlando (see map below). It launched the first phase of its South Florida operations in 2018, connecting Miami, Fort Lauderdale and West Palm Beach. Stations in Boca Raton and Aventura opened in 2022. Construction of its 170-mile, $6 billion phase two extension from West Palm Beach to Orlando began in 2019 and service launched in September 2023.
According to Bloomberg, Brightline is planning to sell $1 billion in “speculative-grade corporate bonds yielding in the high-single to low-double digits” and “another $1.6 billion of debt and equity could come from Fortress or other investors.”
According to April 2 preliminary-offering documents, Bloomberg reported that “Morgan Stanley is leading the new issue sale of revenue bonds.”
Additionally, the bonds “received preliminary designations of BBB- from Fitch Ratings and BBB from Kroll Bond Rating Agency,” Bloomberg reported. “The investment-grade ratings and bond insurance should broaden the market for the higher-speed rail line’s municipal debt and lower its borrowing costs, market watchers say. Brightline’s current muni-bond debt is unrated.”
S&P said in an April 2 release that “[t]he preliminary rating reflects that the project is a first-of-its-kind rail system. It is fully exposed to ridership risk and operational risks,” according to Bloomberg.
Brightline spokesman Ben Porritt declined to comment, Bloomberg reported.
“In addition to paying off Brightline’s currently unrated senior tax-exempt bonds and taxable debt, proceeds will fund almost $550 million in reserves, which S&P sees cushioning against potential ridership and revenue declines, as well as servicing debt for 12 months,” Bloomberg said. “The refinancing—excluding $985 million of subordinate muni bonds—will give Brightline some breathing room, allowing it to extend the ramp-up of operations to 2028 from 2026, according to S&P.
“After the ramp-up period, S&P projected in its base case that Brightline will have almost 2.7 times the revenue to cover debt service in 2030 or as little as 1.4 times in its downside case. S&P’s base case assumed revenue forecasts at 38% to 55% below Brightline’s projections and 52% to 71% lower for its downside case.”
Bloomberg reported that “Brightline has seen a 50% increase in bookings between October and January, driven primarily by a growing repeat customer base, according to S&P. Still, Brightline has cut its 2024 ridership estimates by 30% to about 5 million, citing delays in the opening of the Orlando line.
“‘The local target population has historically had a propensity to travel by car,’ S&P said. ‘But we view that given the increases in bookings and the revenue to date that Brightline should at least achieve our base case forecast.’”
Further Reading:
Capital Line South LRT Extension
The city of Edmonton, Alberta, on April 2 reported selecting the Capital Line Design-Builders team of Ledcor and AECOM as its preferred bidder to design and build Phase 1 of the Capital Line South LRT Extension. It said it will now enter into negotiations with the team with the goal of awarding the contract by the end of May.
Construction of the 2.8-mile (4.5-kilometer) Phase 1 extension is scheduled to begin later this year and expected to take four to five years, followed by testing and commissioning, according to the city. The C$1.1 billion project has funding commitments from the government of Canada, the government of Alberta and the city of Edmonton.
The extension will be completed in two phases. Phase 1 will extend the line from Century Park to just north of Ellerslie Road, and Phase 2 will extend from Ellerslie Road to Allard/Desrochers. Concept design for Phase 2 has been advanced.
Capital Line South Phase 1 includes an underpass at 23 Avenue; bridges crossing Blackmud Creek and Anthony Henday Drive; a new operations and maintenance facility south of Anthony Henday Drive; a neighborhood LRT station at Twin Brooks (which will be smaller in size compared to a multi-modal transit station like Century Park); and a multi-modal LRT station connecting to the Heritage Valley Park & Ride just north of Ellerslie Road.
The city launched its Capital Line South procurement process in June 2022 and short-listed two bidders in March 2023. Both bidders provided technical submissions, including draft designs and plans, and both were also invited to submit a financial proposal. The city said it evaluated these proposals, and the team with the highest combined technical and financial score was selected.
“We’d like to thank the bidding teams for participating in our procurement. We’re confident our fair and rigorous competitive process will ensure Phase 1 of the Capital Line South Extension will result in excellent value for Edmontonians and further strengthen our mass transit network,” said Bruce Ferguson, Branch Manager of LRT Expansion and Renewal with the city of Edmonton.
GCRTA
GCRTA has a new webpage to provide “in-depth information” about its Railcar Replacement Program, the transit agency reported April 4.
At a budget of approximately $393 million, GCRTA said the program aims to replace 40 heavy railcars and 34 light rail cars with 60 railcars that can access both heavy and light rail platforms. “Having a common railcar provides the benefits of reduced inventory and maintenance costs, streamlined mechanic and operator training, and increased rail route flexibility and customer access,” the agency said.
The program budget also supports necessary infrastructure upgrades, such as rail station platform modifications needed throughout the rail system to accommodate the new narrower railcars, according to GCRTA.
Information on the new Railcar Replacement Program webpage includes:
- Program Overview.
- Milestones Timeline.
- Funding and Financial Impact.
- News and Updates.
- Photo Gallery.
Content will be updated regularly until the program reaches completion—currently planned for the fall of 2027, GCRTA said.
