Brightline Trains Florida missed its second interest payment on $1.2 billion of subordinate municipal bonds. The Fortress Investment Group-backed passenger railroad is now in default on this debt, a serious financial setback for the high-profile project.

This default follows a broader struggle for the rail line, which launched service between Miami and Orlando last year. The company has been burning through cash to cover operational costs and construction debt, making this missed payment a critical warning sign for investors.

Bondholders now face potential losses, and the default could complicate future financing for the railroad's expansion plans. The situation raises questions about the long-term viability of privately-funded passenger rail in the U.S. and what remedies the bond trustees might pursue next.