Ecopetrol S.A. announces partial prepayment of loan agreement executed with international banks

Rhea-AI Summary

Ecopetrol S.A. (NYSE: EC) has announced plans to prepay USD 500 million of its USD 1 billion outstanding balance on a loan agreement with international banks. This prepayment, scheduled for October 18, 2024, will be funded by a USD 250 million external credit from Sumitomo Mitsui Banking and USD 250 million from available cash. The move is part of Ecopetrol's integral debt management strategy, aiming to reduce financial expenses and improve credit metrics. This decision demonstrates the company's solid cash position and ability to optimize financing sources, ultimately increasing shareholder returns.

Positive

• Prepayment of USD 500 million reduces outstanding debt
• Expected reduction in financial expenses
• Demonstrates solid cash position and financial management
• Improves credit metrics
• Aims to increase shareholder returns

Negative

• None.

BOGOTA, Colombia, Oct. 10, 2024 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) ("Ecopetrol" or the "Company") announces that to continue with its integral debt management strategy, it plans to prepay on October 18, 2024, USD 500 million out of the USD 1,000 million outstanding balance of that certain loan agreement executed with international banks in September 2023 and maturing in September 2030 (the "2030 Loan").

Ecopetrol plans to prepay the 2030 Loan with the funds from the external credit of USD 250 million executed with Sumitomo Mitsui Banking Corporation (announced through relevant information on August 21, 2024) and available cash on hand for USD 250 million.

This prepayment is expected to reduce the Company's financial expenses and is a result of Ecopetrol's solid cash position and ability to manage and optimize its financing sources.

The prepayment confirms Ecopetrol's commitment to continue improving its credit metrics and increasing shareholder returns.

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Ecopetrol is the largest company in Colombia and one of the main integrated energy companies in the American continent, with more than 19,000 employees. In Colombia, it is responsible for more than 60% of the hydrocarbon production of most transportation, logistics, and hydrocarbon refining systems, and it holds leading positions in the petrochemicals and gas distribution segments. With the acquisition of 51.4% of ISA's shares, the company participates in energy transmission, the management of real-time systems (XM), and the Barranquilla - Cartagena coastal highway concession. At the international level, Ecopetrol has a stake in strategic basins in the American continent, with Drilling and Exploration operations in the United States (Permian basin and the Gulf of Mexico), Brazil, and, through ISA and its subsidiaries, Ecopetrol holds leading positions in the power transmission business in Brazil, Chile, Peru, and Bolivia, road concessions in Chile, and the telecommunications sector. 

For more information, please contact: 

Head of Capital Markets (a)
Cristhian Prado Castillo
Email: investors@ecopetrol.com.co

Head of Corporate Communications 
Marcela Ulloa
Email: marcela.ulloa@ecopetrol.com.co

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SOURCE Ecopetrol S.A.

FAQ

How much is Ecopetrol (EC) prepaying on its loan agreement?

Ecopetrol (EC) is prepaying USD 500 million out of the USD 1 billion outstanding balance on its loan agreement with international banks.

When is Ecopetrol (EC) planning to make the loan prepayment?

Ecopetrol (EC) plans to make the loan prepayment on October 18, 2024.

How is Ecopetrol (EC) funding the USD 500 million prepayment?

Ecopetrol (EC) is funding the prepayment with USD 250 million from an external credit with Sumitomo Mitsui Banking and USD 250 million from available cash on hand.

What are the expected benefits of Ecopetrol's (EC) loan prepayment?

The loan prepayment is expected to reduce Ecopetrol's (EC) financial expenses, improve credit metrics, and increase shareholder returns.