Empire State Thruway Partners bonds affirmed at BBB- as New York service area project stabilizes

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Thruway bonds affirmed at BBB-

Highlights

Fitch Ratings affirmed Empire State Thruway Partners' $269.46 million series 2021 bonds at BBB- with a Stable Outlook as project operations stabilize.
Service area rental revenue rose to $22.1 million in 2025, and year-to-date 2026 revenue is $16.6 million versus a $15.9 million forecast, with full minimum guarantees met.
Debt service coverage ratios are expected to average 1.8x, while leverage remains elevated above 10x until 2035, reliant on long-term revenue growth.

Operations performance and rating rationale

As reported by Fitch Ratings, the agency has affirmed Empire State Thruway Partners, LLC's $269.46 million series 2021 exempt facility revenue bonds at BBB-, with a Stable Outlook.

The affirmation reflects the project's transition to full operations and stable performance through year-to-date 2026, its first full operating year. Service area rental revenue reaches $22.1 million in 2025, compared with $21.8 million at financial close, while year-to-date 2026 revenue stands at $16.6 million against a $15.9 million forecast.

Fitch says revenue remains below original underwriting projections, largely because openings were delayed relative to initial assumptions. Even so, performance across the service areas continues to strengthen as sites mature, there are no persistently underperforming locations, and minimum annual guarantees are being met in full.

The rating also reflects the scale and maturity of the New York State Thruway corridor, where modest but resilient traffic growth supports service area sales. Fitch expects debt service coverage ratios to remain healthy, averaging 1.8x under its rating case scenario, although leverage stays elevated at an average of 14x between 2027 and 2030 and remains above 10x until 2035.

Traffic exposure and long-term revenue outlook

The project's revenue depends on traffic volumes on the New York State Thruway and on steady spending by travelers using food, beverage and other commercial services. Passenger traffic remains relatively flat year over year, reflecting the mature nature of the upstate New York market, but Fitch says the corridor remains essential and should still generate enough growth to support future sales.

Under the 33-year lease with the New York State Thruway Authority, ESTP designs, builds, finances, operates and maintains all 27 service areas and can pass operating obligations to third parties on a back-to-back basis. Applegreen NY Travel Plazas, LLC handles food and beverage operations, while ESTP receives 11.5% of aggregate gross sales revenue after redevelopment, subject to minimum annual guarantees and scheduled escalations.

Fitch says the newly renovated facilities have limited maintenance and capital expenditure needs, helping keep the project's capital cost burden manageable. The bonds are senior and fixed-rate, backed by a six-month cash-funded debt service reserve account and an equity lock-up test of 1.2x, although debt service rises from $11 million to $29 million by the end of the term, leaving part of the credit story dependent on long-term revenue growth.

In our earlier coverage of Fitch’s BBB- rating on Hainan Rubber’s proposed subordinated perpetual securities, we explained that the rating sat below the issuer level due to the notes’ subordinated ranking and the issuer’s ability to defer coupons. We also highlighted Fitch’s view on the company’s elevated leverage and liquidity position, alongside the support considerations tied to its government-related status and group linkages.

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