A bond offering in California that would have helped fund a high-speed passenger train between Las Vegas and the Los Angeles-area has been postponed, delaying the project.
Terry Reynolds, director of the Nevada Department of Business and Industry, said Monday that he first learned of the decision to postpone the hearing over the weekend, according to the Las Vegas Sun.
The bond would help fund the proposed $5 billion train project, called Brightline West. Brightline is the company that already has a high-speed rail service in South Florida.
Earlier this year, California officials approved a $600 million private activity bond allocation, which was supposed to raise up to $2.4 billion for the project. In a statement, California Treasurer Fiona Ma said "economic uncertainty" led to the decision to delay the sale of the bonds.
"Unfortunately, there is not a lot of liquidity in the market," Ma said in the statement. "The project is postponed until market liquidity improves."
In an email to the Sun, a Brightline representative on Monday called the development a "minor setback."
"Although it may impact the initial timeline, we still plan to break ground as soon as possible," the rep said. "The only thing that was postponed was the bond financing."
Reynolds - who said the project still makes "a lot of sense" - said he believed the move by California officials was a smart one.
"I think they're listening to their investors," Reynolds said. "When you get to that size of a bond issue, you're talking about large institutional investors. I think it's a good thing that they're looking at what they need to do to be able to sell the bonds to the investment community. It's a prudent response. There's a lot of things they can do to make that more attractive, so I don't see that as a bad thing."
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