Brightline Rail’s Rough Stretch Sinks Muni Transit Debt Broadly

The struggles of Florida’s Brightline private railroad are rippling through the municipal-bond market, sending junk-rated transportation debt to its worst performance in a decade.

Taxable and tax-exempt bonds of the money-losing rail company, which runs from Miami to Orlando, shed $870 million in market value last month after it delayed an interest payment on about $1.2 billion of debt. Ridership and revenue in Florida are trailing projections, and S&P Global Ratings and Fitch Ratings have cut its senior municipal bonds deeper into junk.

This week it rolled over bonds at a yield of about 15% — almost 13 percentage points ...