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- Brightline, the non-public rail line linking Orlando to Miami, refinanced $985M of junior debt at a record-high 14.89% yield, reflecting deep investor concern after delaying a July curiosity cost on $1.2B in munis. The corporate, already downgraded deeper into junk by S&P and Fitch, faces falling ridership (53% beneath projections) and income (67% beneath estimates), plus a possible money shortfall this quarter with out an fairness infusion. It is a reminder that non-traditional, revenue-dependent initiatives carry excessive credit score and liquidity dangers within the muni area, particularly within the absence of essential-service backing or state/native ensures. Whereas double-digit yields could seem enticing, these securities are extremely speculative and weak to cost delays. They need to be approached with warning except a part of a well-diversified high-yield allocation.
- S&P boosted the ranking on $17.1B of MTA debt backed by farebox and toll income from A- to A, citing ridership restoration, liquidity, manageable deficits, new state payroll tax income, and early success of New York Metropolis’s congestion pricing program. The $9 peak-hour toll for autos getting into beneath sixtieth Road is projected to internet $500M yearly after bills, aiding the company’s $68.4B capital plan. This improve underscores the good thing about devoted income streams and powerful state assist in essential-service transit credit. Whereas the MTA nonetheless carries a heavy debt load and faces future working gaps, greater scores can assist secondary market liquidity and doubtlessly decrease borrowing prices, making these bonds extra secure than many different large-issuer transit credit.
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