Virgin Gets Preliminary OK on California Bonds

A California agency has given Virgin Trains USA received preliminary approval to issue tax-exempt bonds to finance its Xpress West high speed rail project between Southern California and Las Vegas.

The Debt Limit Allocation Committee recommended that Virgin receive the first $300 million of its request, contingent on it providing an economic development plan that outlines its goals, and how it plans to achieve them, in the areas of housing, jobs, and workforce development.

Virgin Trains plans to seek more than $3.2 billion of tax-exempt debt to be issued by a state agency, including more than $800 million in California’s share of U.S. Department of Transportation tax-exempt proceeds.

The company also plans to seek $800,000 in bonds from Nevada, plus part of the federal allocation, providing a total of $4.2 billion in tax-exempt financing for the project.

A similar funding method was used to finance the Brightline service in Florida that Virgin operates.

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