Fortress Investment Group-backed Brightline West (a.k.a., DesertXpress Enterprises, LLC) on Nov. 20 reported entering into a “transaction support agreement that is expected to culminate in a private exchange by holders of a significant majority of the $2.5 billion of Series 2025A Bonds issued by California Infrastructure and Economic Development Bank and the Director of the State of Nevada Department of Business and Industry.”
According to Brightline West, it has “begun construction and is finalizing remaining construction contracts” as part of its 218-mile high-speed rail project that is slated to link Las Vegas, Nev., and Southern California. The company reported the “private exchange and the follow-on public exchange … are intended to facilitate the continued construction.” These transactions, it said, “are designed to allow Brightline West adequate time to obtain the additional equity funding, debt financing, and federal loans for the project while enabling construction to progress.”
“The contemplated private exchange has already received broad support from a supermajority of holders of the Series 2025A Bonds, who constitute most of the largest holders of the Series 2025A Bonds,” reported Brightline West, which noted that it “hopes that 100% of the Series 2025A Bonds will participate in either the private exchange or the follow-on public exchange and is enhancing the terms of the new Series 2025B Bonds that will be received by investors in the exchange.”
Brightline West said it “intends to launch the follow-on exchange, on a public basis, promptly after settlement of the private exchange to allow additional holders of the Series 2025A Bonds to participate on the same economic terms.” All holders that participate in the exchanges, it said, “will receive the same compensation in the form of, among other things:
- “A pro rata portion of up to $1.8 billion (depending on participation levels) of new senior secured bonds in Brightline West (on a par-for-par basis for exchanged Series 2025A Bonds not being repurchased as described below). The new Series 2025B Bonds will be senior in right of payment to Brightline West’s subordinated debt (including any Series 2025A Bonds that do not participate in the exchange).”
- “A pro rata repurchase of participating Series 2025A Bonds of approximately $700 million, at a 1% premium, reducing Brightline West’s outstanding bond debt (excluding escrow bonds anticipated to be issued substantially concurrently with the closing) to approximately $1.8 billion.”
- “Accrued and unpaid interest on such holder’s Series 2025A Bonds validly tendered for repurchase and exchange to, but not including, the closing date (expected to be on or around November 26, 2025.”
- “A pro rata number of warrants for up to 7.5% of the common units of BL Trains Holding West LLC and, in exchange for additional liquidity that may be retained by Brightline West, a pro rata number of warrants for an additional 7.5% of the common units of BL Trains Holding West LLC.”
Brightline West said it has also “committed to raise at least $400 million in equity by March 31, 2026 (and expects to receive $50 million of such equity on each of January 1, February 1 and March 1 of 2026), $250 million of which will be used to redeem the Series 2025B Bonds and the remainder would be used to continue to advance the project.”
Brightline West in April 2024 held a groundbreaking ceremony for the project, for which Siemens Mobility has been designated as the preferred bidder to supply 10 seven-car “American Pioneer 220” electric trainsets capable of speeds up to 220 mph.
Bloomberg this fall said the project will cost $21.5 billion, Railway Age reported, and “[a]ccording to the U.S. Department of Transportation (USDOT) website, which lists Brightline West as a ‘loan applicant,’ and as reported by Bloomberg, the price tag … has swelled by nearly 35%. The higher cost has led the … company to seek $6 billion from the POTUS 47 Administration.”
According to Railway Age’s report, Brightline CEO Mike Reininger acknowledged that costs are rising, and is working on raising the needed funds; Bloomberg reported that “the federal loan ‘will take the place of a $6 billion bank facility on Brightline West’s original financing plan.’ The company, Reininger said, ‘plans to raise equity to cover most of the $5.5 billion increase in construction costs. It initially targeted an equity raise of $1 billion.’”
