KBRA Upgrades Its Rating on Colorado High Performance Transportation Enterprise’s $501 Million I-25 North Express Lanes Revenue Bonds (TIFIA) to BBB+ From BBB
14 Jul 2025 | New York
KBRA upgrades its rating on Colorado High Performance Transportation Enterprise’s $501 million I-25 North Express Lanes Revenue Bonds (TIFIA) to BBB+ from BBB. The Outlook is Stable. The financing plan for the project consists of revenue bonds (the TIFIA bond), which evidences a loan of $501 million from the U.S. Department of Transportation (the lender) to Colorado High Performance Transportation Enterprise (HPTE). The TIFIA bond constitutes federal project credit assistance under the Transportation Infrastructure Finance and Innovation Act (TIFIA) for the I-25 North Express Lanes Project (the project). The TIFIA bond has a subordinate lien priority in toll revenues and other cash flows generated in connection with the project, which included only segment two and segment three. TIFIA bond proceeds will fund eligible project costs for segments five to eight of the project, which did not form part of the trust estate as of financial close.
HPTE is partnering with the Colorado Department of Transportation (CDOT) to operate the project in accordance with an intra-agency agreement and the E470 Public Highway Authority (E470 PHA)―a local governmental authority formed by the counties of Adams, Arapahoe, and Douglas―to collect toll revenues and provide other toll services.
Key Credit Considerations
(+) Toll Revenues Above Projections
Gross transactions on segment two totaled 10.7 million for 2024, up 18.5% from 2023. Similarly, gross transactions totaled 3.2 million for the first four months of 2025, up 6.1% from the same period last year. For segment three, gross transactions totaled 5.4 million in 2024, up 22.8% from 2023. From January to April 2025, transactions reached 1.6 million, up 11.4% from the same period in 2024. Toll revenue (after leakage) of $23.2 million in 2024 is 10.4% above KBRA’s expected level of $21 million.
(+) Strong Debt Service Coverage Ratio
The debt service coverage ratio (DSCR) for the trailing 12-month period ending December 31, 2024, was 10.55x, well above KBRA’s expected 6.69x. This was primarily due to higher-than-expected toll revenues and a greater number of fines from user violations, which incur substantially higher fees than the toll. As a result, the project’s revenues surpassed KBRA’s forecast of $21 million, reaching $35.5 million over the same period. Violations have decreased significantly (92%) since Q3 2023 and revenues are expected to normalize further, given an estimated 80% of violators are one-time offenders.
(+) Transaction Liquidity
The project benefits from several liquidity sources, including a debt service reserve account, operations and maintenance reserve account, and a renewal and replacement account, which are all funded at levels at or above market precedent.
Surveillance Rating Rationale
Traffic and revenues have outperformed KBRA’s rating case expectations since the initial rating was issued in 2023. Moreover, the traffic growth on segment three met ramp-up expectations, with year-over-year growth exceeding 20% from full-year (FY) 2023 to FY 2024. Under KBRA’s rating case, we expect the project to have an average DSCR of 2.3x through the term of the bonds. The rating and Stable Outlook reflect the project’s contractual structure, historical performance, and robust coverages through the term. The project’s attributes, KBRA Project Risk Score (KPRS) of Strong, and strong performance over the surveillance period support an upgrade to BBB+ from BBB.
Outlook
The Stable Outlook reflects KBRA’s expectations that the project will continue to perform in line with recent years, benefiting from stable traffic and revenues. A rating upgrade may occur if traffic significantly exceeds expectations. A downgrade may occur if traffic volumes are consistently lower than KBRA’s projections during the operations phase.
Rating Sensitivities
A rating upgrade could occur if toll revenues are significantly better than expected and consistently outperform KBRA’s projections.
KBRA may downgrade the rating if traffic volumes are significantly lower than KBRA’s projections, resulting in cash flow available for debt service being consistently below KBRA’s projections.
ESG Considerations
Environmental Factors
Given that vehicles are responsible for a meaningful portion of carbon emissions, there could be future regulation or policies that discourage single-occupancy vehicles typically used by commuters, which could impact traffic levels and tolling revenues.
Social Factors
The I-25 Express Lanes are an essential component of the interstate highway system connecting the greater Denver metropolitan region. Project revenues are reliant on traffic volumes from the surrounding neighborhoods, which can be influenced by a multitude of social factors including employment levels and household income. The project benefits from a diversified local economy with higher GDP per capita and median income than the national average.
Governance Factors
HPTE will have oversight of the project throughout the term of the debt. HPTE is owned by the State of Colorado and governed by an independent board of directors. Coordination between HPTE and other governmental agencies, including CDOT and the toll services provider, will be integral in operating and collecting revenues from the project. Policy changes or a lack of transparency between the parties could negatively impact the project.
Note: This press release was updated on July 15, 2025, to correct the 2024 gross transactions for segment three to 5.4 million, previously misstated as 4.4 million.
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