All Aboard Florida gets another year to sell bonds
Posted on January 8, 2016
By Jennifer Sorentrue - Palm Beach Post Staff Writer
All Aboard Florida will get another year to sell $1.75 billion in tax-exempt bonds it plans to use to help pay for its proposed passenger train service connecting South Florida to Orlando.
The U.S. Department of Transportation has given the Coral Gables-based company until Jan. 1 to complete the bond issue. It marks the second time All Aboard Florida has received an extension.
AllAboardFlorida won preliminary approval from the Department of Transportation in December 2014 to issue the privateactivitybonds. The company was initially given until July 1 to complete the sale. In May, AllAboard announced it was seeking an extension of the July 1 deadline, and the company ultimately was given until Jan. 1 of this year to finalize the sale.
All Aboard asked for a second extension late last year. The company had planned to sell the bonds in 2015, but the tight municipal bond market forced the officials to shelve the sale.
“The extension provides us with necessary flexibility to pursue the most appropriate structure for the long-term financing of our business,” said Melissa Shuffield, a spokeswoman for All Aboard Florida. “We are under construction at each of our stations and remain committed to beginning Brightline service in 2017.”
The Florida Development Finance Corp., a special financing unit authorized by the state Legislature to issue tax-exempt bonds to private entities, signed off on the sale in August. Under the plan, the finance corporation would act as conduit issuer of the bonds, which will be sold by All Aboard Florida to private investors.
According to documents filed with the finance corporation, the 30-year bonds would not be rated and would be sold only to accredited investors and qualified institutional buyers.
AllAboardFlorida’sBrightline rail service plans to run 32 trains a day along the Florida East Coast Railway tracks with stops in Miami, Fort Lauderdale, West Palm Beach and Orlando.
Construction is underway on the company’s four stations in Miami, Ft. Lauderdale, West Palm Beach and Orlando, and crews in South Florida have begun work needed to add a second track to the Florida East Coast Railway line.
The company plans to launch service between Miami and West Palm Beach in 2017. The West Palm Beach-to-Orlando span is expected to begin by the end of 2017.
Martin and Indian River counties filed federal lawsuits last year against the U.S. Department of Transportation, challenging whether All Aboard Florida is eligible for the private activity bonds. A judge in June denied the counties’ request for an injunction to block the bond sale, saying, in part, that the money was not a linchpin to finishing the passenger rail line. The suits are still pending.
In court documents filed in May as part of the lawsuits, All Aboard Florida President Mike Reininger said the passenger rail project would be completed with or without the tax-exempt bonds.
The bond are not “irreplaceable element of AAF’s business plan,” Reininger said in a declaration filed in federal court.