Assured Guaranty (AGO) faces enhancing recovery prospects relating to Brightline's bankruptcy filing as the restructuring keeps the bond-issuing operating company out of Chapter 11 and gives the insurer added control over the process, UBS said in a note emailed Monday.

Brightline Holdings and several affiliates filed for Chapter 11 on Sept. 24, while Brightline Trains Florida LLC, issuer of the AGO-insured senior bonds, stayed outside bankruptcy, UBS said, noting Assured Guaranty insures just over half the senior bond stack, giving it majority voting power.

The bank said new post-petition and exit financing, including $350 million of junior debt layered beneath existing senior creditors, should reduce the odds of larger claims losses ahead.

UBS added that the fix is financial, not operational, and that long-term debt service still depends on Brightline's ridership recovery.

UBS maintained its buy rating and the price target of $91.

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