Resolution criteria

Brightline will be considered in default if it fails to make a scheduled debt payment and exhausts its remaining payment deferrals allowed under bond agreements. The market resolves YES if Brightline defaults on any of its debt obligations at any point during 2026. The market resolves NO if Brightline makes all required debt payments throughout 2026 without triggering a default clause.

Resolution will be determined by official announcements from Brightline, bond trustee filings with the SEC's EMMA system (https://emma.msrb.org/), or statements from credit rating agencies (S&P Global, Fitch, Moody's).

Background

Fitch Ratings warned a default by mid-2027 is "highly likely", and S&P projects the most likely path to default is January 1, 2027. Brightline has already missed two interest payments on some of its bonds. The company faces $162 million in debt payments in 2026, while it spent $211 million operating its business during the first nine months of 2025 with revenue of only $156 million, resulting in an operating loss of almost $100 million. Brightline has been seeking to sell a substantial portion of itself and is in discussions for up to $100 million in additional debt.

Considerations

Brightline's bond agreements allow it to postpone one more payment before triggering default, providing a potential buffer. However, Fitch believes Brightline will have sufficient liquidity for its July 2026 senior bond payment but will deplete reserves, and the company lacks funds for a $45 million revolver due in May. Brightline has negotiated debt-for-equity swaps allowing it to exchange debt for ownership stakes rather than cash payments, which could extend its runway beyond 2026 if executed successfully.

This description was generated by AI.