Brightline East upsizes to $1.33 billion, talks secured notes to yield 10¾%-11%

By Paul A. Harris

Portland, Ore., April 24 – Brightline East LLC upsized its offering of senior secured notes due Jan. 31, 2030 (B/B) to $1.325 billion from $1.25 billion and set price talk at 10¾% to 11%, according to market sources.

Books close at 11 a.m. ET on Thursday, and the deal is set to price thereafter.

Official talk comes toward the wide end of the 10% to 11% early guidance.

The Rule 144A for life and Regulation S notes come with three years of call protection.

They also feature a prepaid interest ramp-up reserve that will initially be funded with the expected interest payment on July 1, 2024, plus two years of scheduled interest on the notes, plus $15 million.

In addition, the notes feature a debt service reserve at 25% of the first 12 months of interest payable on the notes, to be funded at the close and maintained at that calculation.

Morgan Stanley & Co. LLC is the sole bookrunner. Citizens JMP Securities LLC, Credit Agricole CIB, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and SMBC Nikko Securities America Inc. are the joint lead managers.

The Orlando-based Florida intercity railroad plans to use the proceeds plus new long-term Brightline Trains Florida LLC and AAF Operations Holdings LLC tax-exempt debt and equity to refinance Brightline Trains Florida (the operating company) debt and fund certain reserve accounts.

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