Brightline West Moves Ahead With New Railway Infrastructure Contracts

High-speed railway Brightline West has signed new contracts to lay tracks and systems for its high-speed railway, according to an email seen by Bloomberg, signaling progress for a project whose municipal bonds have traded at steep discounts since last year.

The railroad finalized deals to build some of the infrastructure to power electric trains a railway that will run at speeds of more than 200 miles an hour, according to the message. The deals were signed in late May, said a person familiar with the matter.

The Fortress Investment Group-backed railroad, which will travel between Southern California and Las Vegas, is also in final negotiations on the last three of nine total infrastructure contracts for the $21.5 billion project, according to the email.

The contract signings come as the price of Brightline West’s 12% of muni bond rose to 63 cents on June 4, a 13% increase from 56 cents a week earlier. The company disclosed in a June 1 securities filing that it executed a contract to build two stations in California and a maintenance facility.

A Brightline West spokesperson confirmed the contents of the email but declined to comment further.

Even with that increase, the bonds remain down 26% since November, when the railway executed a debt swap with bondholders to reduce its debt load. The bonds traded at 63 on Monday morning.

The cost of Brightline West’s 218-mile (351-kilometer) high-speed railway has ballooned 35% from prior estimates. The railway is seeking a $6 billion loan from the Trump administration. An additional $5.5 billion equity investment and $6 billion bank facility hinges on getting the federal loan.