Island residents who drive west of the Florida East Coast Railway tracks have probably noticed that colorful Brightline trains keep getting longer, flashing by with 10 passenger cars in November, up from six in August and from four just last year.

At first glance, that looks like progress and success for the beleaguered high-speed train company. But the appearance is deceiving.

The train company continues to flounder under a crushing, $5.5-billion load of debt in an atmosphere of operational confusion that is reverberating through the bond market.

“Investors are growing more anxious about the ability of Brightline to pay its debts,” Bloomberg reported last week, with one of the company’s bonds trading at 29.5 cents on the dollar.

That means an investment fund that bought $1 million worth of those unrated bonds, lured by the double-digit interest rates Brightline had to pay to attract investors for its buildout for service between Miami and Orlando, now holds an asset worth $300,000 – a 70 percent loss in less than a year.

The new low, hit last Tuesday, follows a deterioration that began in July after Brightline deferred an interest payment on the debt.”

The deferral, which affected $1.2 billion in bonds, did not amount to a default, but “it sent ripples through the high-yield municipal bond market,” according to Morningstar, an investment research, bond rating and wealth management behemoth. “Since then, the largest owners of Brightline debt have suffered steep losses.” The train company now pays 14.89 percent interest on its most degraded bonds.

On the operational side, under intense financial pressure, the company has spent the past year slashing fares, stopping and then restarting the sale of commuter passes, and repeatedly changing the number trains it runs between South Florida cities and between Maimi and Orlando in a scattergun attempt to increase ridership.

“Big price cuts have resulted in 16-percent a boost in passengers, [and] more deals are coming,” USA Today reported in October. “Less than a month after slashing fares to and from West Palm Beach within South Florida, Brightline is cutting prices again ... [with fares] now as cheap as $12.”

A 16 percent increase in passengers sounds good but is unlikely to provide much financial relief since the company was already losing $55 per passenger under the old higher fares, according to the Orlando Business Journal.

The perception of operational chaos at the company was fueled by Brightline’s September Monthly Revenue and Ridership report.

As for the longer trains we see in Vero, the impressive 10-passenger-car lengths are counterbalanced by a 35 percent reduction in the number of trains running between Miami and Orlando.

This summer, there were 32 trains racing between the two cities each day, 16 northbound and 16 southbound. Now there are only 10 trains traveling in each direction for a total of 20 per day.

There was also some genuine good news in Brightline’s September report, which is the most recent available. Total local and long-distance ridership was up 11 percent in September compared to the year before, and revenue was up 13 percent. Year-to-date increases were almost identical to that, with a 13 percent rise in revenue that amounts to an extra $18 million in the first nine months of the year, compared to the same period last year.

But an $18 million increase in revenue is miniscule compared to the company’s costs and losses, the equivalent of bringing a bag of pennies to the bank on the eve of a multimillion foreclosure.

The Palm Beach Post reported in May that the company lost a whopping $549 million in 2024.

“Brightline spent $341 million running and maintaining its trains and stations in 2024, bringing in about $188 million from ticket sales and other sources, for a deficit of more than $153 million,” according to the Post.

In addition, Brightline “paid $178 million in interest on its debt,” and another $218 million to refinance debt.

The company’s operating loss so far this year exceeds $70 million, a number that does not include its massive, ever-increasing interest payments or ongoing construction costs.

Attempting to find a way out, Brightline is looking to sell “equity in the train service to outside investors,” according to Miami radio station WLRN.

How much of the company it is looking to sell, at what price and to whom isn’t known, but Brightline said in the September report that it “continues to actively progress the planned issuance of a substantial amount of equity, with a global process underway engaging with numerous potential strategic partners.

“Equity proceeds would be used to repay principal and interest of existing debt and to increase cash reserves.” 

Unverified reports floating around on the Internet say the company will run out of operating funds by the end of the year, but Brightline says it has enough cash to keep running trains and paying bond interest until 2027.

Now backed by Fortress Investment Group, Brightline was founded as All Aboard Florida in 2012 and went through several changes in ownership before completing its 235-mile Miami to Orland route in September 2023.