Florida News Service courtesy Orlando Sentinel
We should note that Private Activity Bonds are exempt from Federal Income Tax, but are not guaranteed by any party other than the issuer. If there is to be a default, then I'd dare say the only assets the creditors could attack are the trains, as apparently the stations and other buildings are held by a separate entity.Members of Florida’s congressional delegation are split over bonds for the Orlando leg of the controversial Brightline passenger train service that expanded south to Miami last week.
In separate letters, delegation members urged U.S. Transportation Secretary Elaine Chao to support or suspend $1.15 billion in federally authorized tax-exempt bonds that Brightline’s parent company, All Aboard Florida, intends to use to finance a northern expansion of the service through the Treasure Coast to Orlando
Essentially, they would be unsecured.
Once again, a major rating agency, Fitch, has labeled any such issue "junk". The other two, Moody's and S&P, will surely follow suit. While AAF could successfully "float" them, it would be a private placement to parties, such as "High Yield" mutual funds, willing to accept a lot of risk.