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Fortress’s Muni-Fueled Florida Rail Dream Faces Wary Investors

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Fortress Investment Group LLC’s plan to sell $1.75 billion of municipal debt to build the first privately run passenger railroad in a century is drawing opposition from some Florida residents. Bond buyers may pose a bigger obstacle.

Debt of All Aboard Florida, the company owned by Fortress private-equity funds that’s building the project, has lost more than 7 percent of its market value since it was issued in June. And the company has been paying interest in kind, racking up more debt, according to data compiled by Bloomberg.