(Jeff Carter) – Last March, I told Nevadans that the high-speed rail line in Florida was going bankrupt.
It did. They are restructuring the debt.
It didn’t take a crystal ball to foresee the future. It took math.
Unfortunately, high-speed rail proponents stink at math.
Even though Brightline West is a “different entity” than Brightline East, it probably won’t make it either.
Brightline East has track built and an operating train line that loses gobs of money.
Brightline West has $2.5 billion of unrated debt, making it one of the largest and closely watched credits in the high-yield municipal bond market.
None of the rating agencies have given it a rating because it’s pretty hard to rate. That changes investor appetite for that debt.
Brightline West is seeking a $6 billion Railroad Rehabilitation and Improvement Financing loan that municipal market investors view as not only key to the project’s viability, but also to its ability to repay bondholders
The entire project’s cost has ballooned to $21 billion, and if we know anything about high-speed rail, that number isn’t right either.
Combine that with the fact that interest rates have increased, and the costs to finance the project aren’t going to be insignificant either.
Who is helping them find the $6B? Nevada Democratic Senator Jackie Rosen.
Democrats never met a rail project they didn’t like. That is, even though those tax dollars go into a black hole that never amounts to anything.
She is spending your money on a train to nowhere.
Rosen previously got a $3B federal grant for Brightline West. All that taxpayer money is gone, down the rat hole.
If Brightline West doesn’t get the loan, bondholders won’t be paid off. If they can’t pay off their bonds, they will need to find some other financing.
Good luck with that.
Right now, the entire project is an expensive parking garage. Billions have been spent, and not one mile of track has been laid.
The train line will not be operational for the 2028 Olympics, as it was touted upon its announcement.
Locally, many Democratic candidates for Assembly are touting a “circulator” for Las Vegas. That would be a total boondoggle of tax dollars too.
Recall, the monorail has gone bust several times. Vegas also has the Boring Company tunnels expanding, which are profitable.
Driverless cabs are here and hopefully will proliferate. Fully self-driving cars will grow in usage.
Any candidate stumping for local light rail is showing a severe lack of intelligence.
One other fly in the ointment is that the Las Vegas project was pledged as collateral for the Florida project.
Even though there is a Brightline East, and a Brightline West with two separate governance structures, the capital structures are now intertwined.
Brightline Florida subordinate muni bondholders and so-called commuter holders have equity liens on Brightline West, the result of prior negotiations over late debt payments.
The negotiated agreement preserves their rights to the equity, but the cross-collateralization may carry consequences
If Brightline East doesn’t get favorable rulings in court on restructuring, Brightline West will crater.
What’s the solution?
- Kill the project. It’s a sunk cost. Spend no more public tax dollars on it.
- Expand I-15 between LA and Las Vegas. Pouring more concrete makes sense.
- Deregulate air travel between the two cities and make it more competitive.
High-speed rail is nice in other countries for a large variety of reasons. It doesn’t work in the United States.
ADDED:
It helps to know where the actual market is pricing Brightline.
Brightline bonds are currently trading at .68 cents on the dollar. Originally, they were issued at a 12% coupon. They are a tax-exempt bond.
At a price of 68, a 12% coupon (12 per 100 of face) produces a current yield of about 17.6%. Sounds great, except there is a high probability that you won’t get paid.
If it were trading at par, the price would be $1.
Name another tax-exempt bond trading at a price like that.
This shows that there is no investor demand for this debt. Not worth the risk. 30-year Treasury yields are 5.6%. Chicago and Detroit’s debt trades at a better price.
In 2008, Lehman debt did the same thing. Current yields were high because bond price plunged. Nevada Treasurer Kate Marshall took the plunge too and lost taxpayers $50MM. She’s running for Reno mayor.
Of course, if you elect Drew Johnson as Nevada Treasurer, he’d buy them because they are the bigger number.
This article was originally published via JeffreyCarter.substack.com on 10/6/2026. The opinions expressed by contributors are their own and do not necessarily represent the views of Nevada News & Views. Digital technology may have been used in the research, writing, or production of this article. Please verify information and consult additional sources as needed.
