Ecopetrol, Colombia’s state-owned oil company, has successfully issued $1.75 billion in external public debt bonds.
The company plans to use these funds to buy back bonds maturing in 2026 and prepay other obligations. The bond sale attracted significant interest from investors.
Demand exceeded the amount offered by 2.6 times, with over 200 investors from the United States, Europe, Asia, and Latin America participating.
This strong response demonstrates the international market’s confidence in Ecopetrol’s financial stability. Ecopetrol highlighted that the bond issue reflects its solid credit profile.
The company achieved favorable terms, with the spread and coupon being the lowest it has obtained in the past two years. This outcome suggests that investors view Ecopetrol as a reliable borrower despite recent political developments.
Ecopetrol Raises $1.75 Billion in Bond Sale. (Photo Internet reproduction)
The bond sale took place a week after the National Electoral Council opened an investigation into Ecopetrol’s president, Ricardo Roa.
Ecopetrol’s Bond Sale Amid Political Uncertainty
The probe relates to President Gustavo Petro’s campaign, which had initially forced the company to postpone the bond operation. The bonds, set to mature in 2032, were sold with a yield of 7.8%.
This rate was slightly higher than the 7.65% yield that Ecopetrol officials had initially expected, according to Bloomberg. The difference might reflect some investor caution due to the ongoing political situation.
In addition to the new bond issue, Ecopetrol announced details of its buyback offer for bonds maturing in June 2026. The company set the repurchase price at $1,011.90 for every $1,000 of face value.
This move aims to manage the company’s debt profile effectively. Roger Horn, a senior emerging markets strategist at Mariva Capital Markets, commented on the swift return to the market.
He suggested that investors might be more optimistic about the political headlines than bankers had anticipated. Horn also noted the positive signal sent by the market’s openness to a traditional quasi-sovereign oil company.
The successful bond sale indicates that Ecopetrol maintains access to international capital markets. This access is crucial for the company’s ongoing operations and future investments in Colombia’s energy sector.
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