Brightline West Offers $3.2B in Bonds to Build Las Vegas to California High-Speed Train
Posted on: September 29, 2020, 01:11h.
Last updated on: September 29, 2020, 02:30h.
Brightline West, formerly known as XpressWest, the high-speed rail project that seeks to connect Las Vegas with Southern California, is turning to investors to raise capital through the issuance of $3.2 billion in bonds.
High-speed rail operator Brightline has announced it will sell $3.2 billion worth of bonds to help fund the $8 billion project. The company did not specify what sort of interest investors will receive, nor the maturity date.
“A bond is a fixed income instrument that represents a loan made by an investor to a borrower,” Investopedia explains. “Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations.”
First conceptualized in 2005 as DesertXpress, then XpressWest, then Virgin Trains USA, and now Brightline West, the infrastructure project has been long imagined. The current version of the development would build 170 miles of high-speed rail connecting Las Vegas with Victor Valley, California, with further expansion to Los Angeles to follow.
Travel time would be approximately 85 minutes or roughly two times faster than driving. Brightline is a privately-run company that presently operates train service in Florida from Orlando to Miami.
Las Vegas Economic Boost
Economic analysts in Southern Nevada believe connecting California with America’s gambling capital via high-speed rail would be a major boost for the region. The Las Vegas Convention and Visitors Authority (LVCVA) reports that 18 percent of all visitors to Las Vegas in 2019 arrived from Southern California.
Visitors from Southern California to Las Vegas visit primarily to gamble at a higher rate (21 percent) than any other feeder market. Twenty-six percent of Southern California visitors to Las Vegas receive a comped casino hotel room, also the highest rate of any metered origin.
Southern California visitors on average spent $323 on food and drink, $105 on shopping, and $658 gambling. SoCal visitors additionally are significantly more likely to have an annual income of $80,000 or more (48 percent compared with 37 percent for all other domestic visitors). They’re also younger, 29 percent being under the age of 30.
The market is crucial to Las Vegas, and Brightline West would connect Californians with Sin City faster.
It could be enormous for Vegas,” Andy Kunz, president and CEO of the US High Speed Rail Association, told Casino.org this year. “It could double the number of people coming to Vegas.”
Brightline says 50 million one-way trips are made annually between Southern California and Southern Nevada, 85 percent by car or bus. Brightline trains are zero-emission, electric people-movers that can travel up to speeds of 200 mph.
Virgin Ltd. Out
Shortly after acquiring the rights to XpressWest in late 2018, Brightline signed a partnership deal with Virgin Trains to operate the rail service under the Virgin brand. But in August, Brightline announced Virgin had derailed the arrangement.
We will no longer use the Virgin brand following our parent’s (company) termination of its licensing agreement with Virgin Enterprises Limited,” a Brightline filing read.
Should the $3.2 billion bond offering be completed, Brightline plans to break ground later this year. Station construction is slated to begin in 2023.
Related News Articles
Similar Guides On This Topic
Related News Articles
June 8, 2022 — 2 Comments—