All Aboard Florida Mezzanine Holdings, LLC
IN DECEMBER 2015 WE WROTE ABOUT HOW NEW FORTRESS ENERGY, LLC (NFE) WAS FORMED ON NOVEMBER 19, 2015 AS THE NEWEST NEW FORTRESS / ALL ABOARD FLORIDA / BRIGHTLINE AFFILIATE.
But now, after reading columnist Ray McNulty’s article in the June 16, 2016 issue of 32963 entitled “Will All Aboard Florida be Funded by the Chinese?”we did some digging and found that another entity, All Aboard Florida Mezzanine Holdings, LLC, has already received Chinese funding for the All Aboard Florida project.
It’s not about that they may receive Chinese funding, its about how they already have.
In June 17, 2014 All Aboard Florida (AAF) issued $405 million of debt to help finance its high-speed railway along the state’s eastern coast. AAF Holdings LLC sold 12 percent, five-year bonds with a payment-in-kind (PIK) toggle option. PIK are one of the riskiest forms of debt, yielded 10.25 percentage points more than similar-maturity Treasuries. (Source: Bloomberg)
According to “All Aboard Florida Project – EB5 Visa Program,” which Mr. McNulty referred to as the potential Chinese funding for their $ 1.75 billion in Private Activity Bonds, the CanAm Florida Regional Center (CARFC) has already loaned AAF Mezzanine Holdings, LLC $300 million of EB-5 capital of the $405 million in 2014 debt, referred to above, “to build, own and operate the AAF South Segment passenger rail services.” (http://w.w.w.eb5visa-program.com/all-aboard-florida-project.php)
AAF Mezzanine Holdings, LLC is a Delaware limited liability company formed to own 100% of the equity interests of AAF Holdings, LLC. It is a wholly owned subsidiary of Florida East Coast Industries, LLC (“FECI”). FECI is owned by certain private equity funds managed by affiliates of Fortress Investment Group, LLC (“Fortress.”)
We were unable to find out any information about AAF Holdings, LLC. except from this website: http://www.corporationwike.com: “AAF Holdings LLC filed as a Foreign Limited Liability in the State of Florida on Tuesday, June 10, 2014 and is approximately two years old, according to public records filed with Florida Department of State. A corporate filing is called a foreign filing when an existing corporate entity files in a state other than the state they originally filed in. This does not necessarily mean that they are from outside the United States.”
Inasmuch as this filing was seven days before the bonds were sold, we have to assume AAF Holdings LLC was set up as the financing arm to sell the FECI’s $ 405 million in “junk” bonds, of which $300 million were sold to All Aboard Mezzanine Holdings, LLC., who was loaned $ 300 million from the EB-5 Visa Program.
The US Immigrant Investor Program (EB-5) is overseen by the US Citizenship & Immigration Services (USCIS). It was originally established as a pilot program by Congress in 1990, designed to stimulate economic activity and job growth, including increased export sales improved regional productivity, job creation or increased domestic capital investment.
Now, a full fledged program, it allows foreign nationals to become conditional permanent U.S. residents for a period of two years upon making an investment of $ 1 million, or $ 500,000 in an Targeted Employment Area (high unemployment or rural area) so long as the investment creates or preserves 10 jobs for U.S. workers excluding the investor and the immediate family. Once the job creation requirement is met, the two year conditions are removed and the EB-5 immigrant investors may obtain unconditional permanent residency.
In 1993 the US government allowed for the formation of regional centers to enable immigrant investors to pool their funds into larger job-creating businesses. CanAm Enterprises, LLC, based in New York City, with more than 30 years of experience in promoting and administering private and government immigration-linked investment funds is the administrator of the regional centers.
According to its web page, “CanAm’s team is committed to providing exceptional service so that your immigration and investment goals can be reached in a timely and seamless fashion.”
Once again, according to its web page, CanAm’s staff provides investors with the latest immigration procedures and requirements related to the EB-5 Program.
- Preparation of evidentiary documentation for green card applicants.
- Monitoring of the project as it relates to job creation.
- Preparation of Semi-Annual Reports to the investors regarding to the status of the investment project.
- Preparation of annual reports to USCIS regarding projects and investor statistics.
[What’s interesting is that CanAm had its beginning in 1987 in Canada’s Business Immigrant Investment Program. Over the next 15 years, CanAm raised approximately $ 192 million from over 1,400 qualified investors. But, according to a April 25, 2014 article by Tom DeWeese entitled “Is the U.S. Being Colonized by Red China? the Canadian government has decided recently to halt its immigrant investor program due to the large number of Chinese applications that were found to be fraught with fraud and corruption and to be of little economic benefit to the country.”]
The CanAm Florida Regional Center (CAFRC) was the seventh Regional Center operated by CanAm Enterprises as designated by the US Citizenship and Immigration Services (USCIS).
CARFRC’s first project, All Aboard Florida, was pre-approved as a qualified project by USCIS as part of the Regional Center designation. As a result, subscribers were accorded deference in the adjudication of I-526 petitions.
Now, if you got to https://www.canamenterprises.com/about-us/track-record.html you will see that the CanAm Florida Regional Center Track Record as of May, 2016 reports a loan of $300,000,000 to All Aboard Florida by 600 investors ($500,000/each) with a maturity date of 8/15/2020.
So, once again, it’s not about how All Aboard Florida may receive Chinese funding, its about how they already have.