Florida East Coast Railway
Jacksonville, Fla. (Jan. 19, 2011) – Florida East Coast Railway
completed a successful refinancing through the sale of
$475 million of six-year senior secured notes at an interest rate of
8.125 percent.
“We are very pleased with the outcome of our refinancing, which we
believe will position Florida East Coast Railway to capitalize on
exceptional opportunities for growth,” said James Hertwig, president and
CEO. “The pricing of the senior secured notes we issued today was very
attractive, with investor demand reflecting the strong underlying
fundamentals of our company. We also extended the maturity of our
long-term debt to 2017, which will provide significant capital
flexibility going forward. We look forward to continuing to build our
business from a very solid financial base, with a focus on what we
believe are extremely attractive opportunities to grow our franchise
through disciplined investments.”
Bank of America Merrill Lynch served as the bookrunning manager for the sale.
The Port of Miami is also restoring its railway connection to the
FEC's Hialeah rail yard with money provided under a federal
stimulus program.
With the canal's widening project under way, South Florida's ports
want the big ships to stop here first and unload containers onto the FEC
Railway for fast delivery all the way into the nation's heartland. (The
FEC connects with some of the nation's biggest railways systems, such
as Norfolk Southern and CSX.)
All Aboard Florida
All Aboard Florida, a unit of
Fortress Investment Group LLC (FIG), issued $405 million of debt to
help finance a high-speed railway along the state’s eastern
coast over the opposition of some local residents.
AAF Holdings LLC sold 12 percent, five-year bonds with a
payment-in-kind toggle option, which allows interest to be paid
in additional notes, according to data compiled by Bloomberg.
The PIKs, one of the riskiest forms of debt, yielded 10.25
percentage points more than similar-maturity Treasuries. AAF
increased the offering from $390 million previously marketed.
The company applied for a $1.875 billion loan from the
Federal Railroad Administration, according to Lauren Dunaj, a
spokeswoman for All Aboard Florida who works for Finn Partners.
Fortress, the first publicly traded private-equity and
hedge-fund manager in the U.S., acquired All Aboard Florida’s
parent company, Florida East Coast Industries Inc.
Vincent Signorello
After being denied a requested $1.875 billion in federal loans to help build its high-speed passenger rail line. All Aboard Florida has modified its financing plan for its proposed
passenger rail service, the company's president
said Monday. Now, All Aboard Florida instead will use what's known as private activity bonds to finance the project.
The U.S. Department of Transportation must approve this funding
mechanism, enabling the bonds to be tax-free for investors. A unit of
the state economic-development organization Enterprise Florida, called
the Florida Development Finance Corp., will act as the issuer of the
bonds, but assumes no financial liability.
Robbing Peter to pay Paul.
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