Virgin Trains seeks OK for bonds to fund high-speed Las Vegas route

LA Metro talking to passenger company about helping extend Vegas service to Los Angeles
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A Brightline train departs West Palm Beach, Fla., in January 2019. As it did in Florida to finance its expansion to Orlando, Virgin Trains USA is seeking approval to sell bonds for construction of a high speed rail line between Southern California and Las Vegas, Nev.
TRAINS: David Lassen

LOS ANGELES — Virgin Trains USA is seeking approval in California and Nevada to raise up to $3.6 billion in tax-exempt bonds for its proposed high speed rail service between Southern California and Las Vegas. And the passenger company has begun holding talks with LA County’s Metropolitan Transportation Authority about some aspects of that service.

The Bond Buyer reports that Virgin Trains’ application to California’s Debt Limit Allocation Committee will look to borrow $2.4 billion in unrated private activity bonds, and will also look to raise another $1.2 billion through a Nevada agency. The California agency will consider the application in September.

Virgin Trains used a similar funding mechanism in Florida to raise $1.75 billion for expansion of the former Brightline passenger service to Orlando from its current operation between Miami and West Palm Beach, Fla. [See “Virgin Trains USA raises another $1.75 billion in latest bond sale,” Trains News Wire, April 19, 2019.] Those bonds were fully subscribed two weeks after going on sale in April, allowing construction on the West Palm Beach-Orlando segment to begin in May.

The Las Vegas project had previously been reported to be facing a delay after Virgin Trains was unable to secure tax breaks from the Nevada legislature. [See “Virgin Trains USA to delay start of LA-Las Vegas project,” Trains News Wire, June 7, 2019.]

Meanwhile, Curbed Los Angeles reports that LA Metro CEO Phil Washington told his agency’s board of directors last week that Metro and Virgin Trains “are having discussions .. as we speak.”

Washington said Metro would not be directly involved in the Virgin Trains operation, it might be able to help facilitate the extension of service to Los Angeles. Initial plans call for the Las Vegas service to originate and terminate in Victorville, more than 80 miles from downtown L.A.

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