KBRA Downgrades Ratings for Brightline East LLC’s Senior Secured Notes to CCC From B-
6 Feb 2026 | New York
KBRA downgrades to CCC from B- its ratings for Brightline East LLC’s $1.33 billion senior secured notes. The Outlook is Negative.
The downgrade reflects the company’s continued underperformance compared to KBRA’s forecast in 2025, which increases Brightline East’s risk of default in the near term, as liquidity at the operating company (OpCo) level remains limited and cash from operations will not be sufficient to allow for distributions to the issuer under KBRA’s rating case.
Brightline East is the indirect owner of Brightline Trains Florida LLC (Brightline Florida), the owner and operator of a 235-mile intercity high-speed passenger rail connecting Southeast and Central Florida. In December 2024 Brightline East repurchased $206.2 million of senior notes, reducing the outstanding balance to $1.12 billion.
Key Credit Considerations
(-) 2025 Performance Below KBRA Forecast
Ridership and revenue in 2025 continued to improve but did not reach KBRA’s expectations, with annual increases of 12.8% and 14.1%, respectively, compared to forecast growth of 26.3% and 37.5% under our rating case. Performance was constrained for most of the year by limited capacity while the company awaited additional train cars, which were delivered in December 2025. Notably, November and December—following the completion of fleet expansion—showed ridership and ticket revenues exceeding monthly forecasts, signaling potential for improved performance in 2026. However, ancillary revenues remained considerably below KBRA’s expectations in 2025, which partially offset the increase in ticket revenues.
(-) Limited Liquidity
Under KBRA’s updated assumptions, and given that no distributions from the OpCo are expected before 2027, the liquidity currently available will be sufficient to cover debt service through July 1, 2026, but would fall short in covering the January 2027 debt service obligations, exposing the transaction to a potential default should ridership and revenues not significantly exceed KBRA’s forecast.
Surveillance Rating Rationale
The rating downgrade reflects Brightline East’s continued exposure to weak operating performance and liquidity erosion at the OpCo level, where 2025 ridership and revenue growth fell short of KBRA’s expectations. While full capacity was achieved in late 2025 and recent ridership trends are encouraging, distributions from OpCo to Brightline East are not anticipated before 2027 under KBRA’s current forecast, when we expect Brightline East to run out of liquidity. Therefore, we still expect a default at the parent level as early as January 2027 under our rating case. Refinancing risk continues to be viewed as a mitigating consideration, albeit to a lesser extent than in last year’s assessment. KBRA updated its discounted cash flow (DCF) analysis to reflect the project’s revised operating forecast, resulting in a DCF-to-debt ratio of 2.32x as of January 2027, down from 4.93x in the prior year. While the project continues to benefit from a long asset life and infrastructure value, its limited near-term cash flow outlook reduces financial resilience in downside scenarios.
Outlook
The Negative Outlook reflects KBRA’s updated ridership forecast, under which distributions to Brightline East are not expected before its liquidity reserves are depleted in January 2027, at which point the transaction could be facing high solvency risk. An upgrade is unlikely due to the slower-than-expected ramp-up, as well as the structural subordination of the notes to any existing and future debt issued by Brightline Florida.
We could lower the ratings further if performance during 1H 2026 fails to achieve the ridership and revenue levels necessary to allow distributions to the parent ahead of the January 2027 payment date.
Rating Sensitivities
An upgrade is unlikely given the structural subordination of the notes to all debt issued at the Brightline Florida level.
We could lower the ratings if there were lower-than-expected ridership and/or revenues, a slower or more prolonged ramp-up period, or higher operating costs than forecast in KBRA’s rating case that expose Brightline to high liquidity and solvency risk.
ESG Considerations
Environmental Factors
Brightline Florida’s passenger rail service is estimated to represent a 75% reduction of CO2 emissions per passenger kilometer compared to car transportation. Therefore, the transaction could potentially benefit from future regulations to address carbon limits and promote public transportation.
Social Factors
A shift in traveler preferences toward cleaner and more efficient modes of transportation could benefit Brightline Florida’s ridership, particularly if these changes prove durable. However, given the high exposure of the passenger rail industry to economic cycles, ridership could be impacted by economic downturns that result in rising unemployment and a reduction in disposable income.
Governance Factors
Brightline Florida’s management team comprises professionals with a wealth of experience in the transportation and hospitality industries. Further, the company’s construction management and operating teams come from diverse backgrounds with experience in some of the largest rail systems in the country, in addition to benefiting from Siemens engineers on site 24/7.
To access ratings and relevant documents, click here.