00:00So Eliza Brightline has been kind of struggling for a while here. How how likely is it that something will
00:06come along for this.
00:09Well what what it seems to be the base case for creditors involved and advisors that are that are in
00:15the middle of pretty serious negotiations right now.
00:18It seems that most likely the company is going to have to have a change of ownership.
00:24So either the creditors are going to take over in an in-court chapter 11 restructuring small chance they can
00:31get that done outside of court or or a strategic buyer if a strategic buyer emerges that is willing to
00:37pay enough that buyer could purchase Brightline outside of court and they need to be able to pay back all
00:44of the debt right now though that Brightline can't afford to service otherwise so it would require a huge cash
00:49infusion.
00:49Right this is a five and a half billion dollar debt pile who owns this debt.
00:55The senior or many much of the senior municipal bonds are owned by Nuveen and First Eagle two giants in
01:01municipal bond land and they are in direct communication with Brightline as far as I know and the corporate bonds
01:11which are really important in this case because they are really the fulcrum security here are owned by three hedge
01:17funds that have experience in distressed assets.
01:20Those are Redwood are stay on nut tree capital.
01:23So those guys are well versed in doing the kind of what we call creditor violence that allows them to
01:30be in the best position to take over the underlying company and at a pretty low price.
01:37And it often involves a lot of pain for other debt holders.
01:40And of course there's there's a municipal bond insurer involved as well.
01:45Who is that and how much are they at stake for.
01:49Assured guarantee is the insurer and this would be one of the biggest hits it is facing.
01:57It insures some of the muni bonds. And of course if those guys take losses assured guarantee has to pay
02:02them. So very unclear still where all the recoveries would shake out.
02:07But however big the haircut is for the holders assured guarantee would face making them whole.
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