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Brightline Prepares for Chapter 11 Filing to Restructure Corporate Debt, Bloomberg Reports
Brightline, the private passenger rail operator in Florida, is preparing to file for Chapter 11 bankruptcy protection as soon as this week to restructure a portion of its debt, according to a report from Bloomberg citing people familiar with the matter.
Restructuring Plan Details
The potential court-supervised restructuring would focus on approximately $1.1 billion of corporate debt. This debt is subordinate to the company's senior municipal bonds within its complex capital structure, meaning it holds a lower priority for repayment.
Crucially, the planned filing would reportedly exclude Brightline's operating unit. This legal separation is designed to allow train services to continue running without interruption and avoid the appointment of a federal trustee to oversee operations.
AdFinancing and Negotiations
To facilitate the process, Brightline is reportedly finalizing a bankruptcy-financing agreement with key stakeholders. The group includes municipal bondholders led by First Eagle Investment Management and Nuveen, along with the bond insurer Assured Guaranty.
This follows a previously reported agreement from last month where Assured Guaranty committed to providing at least $350 million in new loans. The Fortress Investment Group-backed railroad also remains in discussions with a group of hedge funds that hold its corporate bonds. The timing of any potential filing remains subject to change, according to the report.
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