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[QUOTE]Originally posted by Gilbert B Norman: [QB] "Five Days and a Wake-up" - Tick, Tock, Tick Tock. As I've previously noted at this discussion, and forgive if I reiterate previous points, I am [i][b] not opposed [/i][/b] to AAF; just skeptical. That a major rating agency has labeled one debt security issue of $600M as "junk", I wish them luck with their $1.2B. That the issues will qualify as "Private Activity" and hence are Exempt from Federal Income Tax, does not mean there is anything beyond the revenue AAF generates to meet the debt service. Now selling - "floating" - them becomes a new ball game. Sure in their Executive Suite they can talk about "a low B" rating meaning 5% today. That could well be their coupon rate. But what if the Market says that this "junk" with its "C" rating is only good for a 7.5% effective interest rate? that means the $1.8B face would only raise about $1.0B - and for that, they'd just be back for more, and the chance AAF will ever be a private sector enterprise obviated. I think that with the railroad now sold to Mexican interests and AAF's parent, FECI, sold to Japanese, is simply complicating matters. Who says that these foreign entities have the interest in this "just might make it" venture that the one entity there when the project was first announced during '12 apparently had. FtL-W Palm "hasn't a prayer" and the best it could be is an employee training ground. Even a Miami-W Palm "Super Shuttle" I doubt has much expectation of success. Maybe, just maybe, McCoy-Miami could make a go of it, but simply "making book" with the farebox (the measurement Amtrak thinks "they're almost there") is not what private enterprise expects. The foreign ownership of both entities makes it unlikely they could ever expect a public subsidy such as a guarantee on the debt service. These "any day now" announcements just further my skepticism. At first, I thought AAF was a "fatten the steer" ploy to sell the railroad to the State, as they are the greatest "party in interest" to ensure the JAX Gateway remains open. Any other major East Coast port has two railroads serving it; the maritime industry does not enjoy being at the mercy of one road, which would be the case for the Florida ports if either CSX or NS got its hands on the FEC. On that point, I was evidently mistaken. At this time, AAF's "bailout costs" are minimal. I'm certain that either a Local rail passenger agency or Amtrak themselves would take the Siemens locomotives and cars, and I'm certain Miami Central will be a going concern with or without AAF. If Neo-PANAMAX traffic is to grow for the Florida ports, then the double tracking that's been done along the Gold Coast will be put to use. The Shops are little more than a metal shell over a "pit stop" as I'm sure any "heavies" would be contracted out. The real "White Elephants" will be the two station structures at FTL and WPB. If they remain standing, they will be monuments to a business plan that went amok and B-School's will have as a case study for a long time to come. [/QB][/QUOTE]
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