Ecopetrol S.A. Announces the Settlement of a Partial Make Whole of its International Notes due 2026

Rhea-AI Summary

Ecopetrol S.A. (NYSE: EC) has successfully settled a partial make whole of its international notes due 2026. The company repurchased US$250 million of the original US$1.5 billion notes issued in 2015. The repurchase price was US$1,014.41 per US$1,000 of principal, totaling US$253,602,675.24 plus accrued interest. This action, announced on August 6, 2024, aligns with Ecopetrol's financial plan and demonstrates its commitment to proactively refinancing its 2026 maturities.

Ecopetrol, Colombia's largest company, is a major integrated energy player in the Americas. It dominates Colombia's hydrocarbon production, transportation, and refining sectors, and has expanded its portfolio to include energy transmission and road concessions through its acquisition of ISA shares.

Positive

• Proactive management of debt maturities, potentially improving financial flexibility
• Demonstration of strong financial position allowing for early debt repayment
• Partial repurchase may lead to reduced interest expenses in the future

Negative

• Slight premium paid on the repurchase (US$1,014.41 per US$1,000 of principal)
• Use of cash reserves for debt repayment may reduce available funds for other investments or operations

Financial Analyst

Ecopetrol's partial make-whole of $250 million in notes due 2026 is a strategic move to manage its debt profile. The company paid a 1.44% premium over face value, indicating favorable market conditions. This proactive refinancing approach demonstrates financial prudence and may lead to improved debt ratios.

The transaction's timing, two years ahead of maturity, suggests Ecopetrol is taking advantage of current interest rates. This could result in lower interest expenses if new debt is issued at more favorable terms. However, investors should monitor the company's overall debt levels and how this fits into its broader financial strategy.

Energy Sector Analyst

Ecopetrol's debt management strategy reflects the broader trend in the energy sector of optimizing capital structures. As Colombia's largest energy company, its financial decisions carry significant weight. The partial repurchase indicates confidence in future cash flows, likely supported by its diversified operations across hydrocarbons, petrochemicals and energy transmission.

The company's expansion into power transmission through ISA acquisition shows a strategic pivot towards energy transition. This debt refinancing could be part of a larger plan to allocate capital more efficiently across its evolving business segments. Investors should watch for further moves that might signal shifts in Ecopetrol's long-term energy strategy.

BOGOTÁ, Colombia, Sept. 5, 2024 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) ("Ecopetrol" or the "Company") announces that today was the settlement of the partial make whole of the Notes due 2026, originally issued in 2015 for a nominal amount of US$1.5 billion. This make whole covered a notional amount of US$250 million and the repurchase price was US$1,014.41 per US$1,000 of principal, for a total of US$253,602,675.24, plus accrued interest up to the redemption date.

The partial make whole was announced by the Company on August 6, 2024, in line with the objectives of its financial plan and confirms Ecopetrol's commitment towards a proactive refinancing of its maturities in 2026.

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) 
Lina María Contreras Mora
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

What was the amount of Ecopetrol's (EC) partial make whole of 2026 notes?

Ecopetrol (EC) repurchased US$250 million of its international notes due 2026, out of the original US$1.5 billion issued in 2015.

What was the repurchase price for Ecopetrol's (EC) 2026 notes in the partial make whole?

The repurchase price for Ecopetrol's (EC) 2026 notes was US$1,014.41 per US$1,000 of principal, totaling US$253,602,675.24 plus accrued interest.

When did Ecopetrol (EC) announce the partial make whole of its 2026 notes?

Ecopetrol (EC) announced the partial make whole of its 2026 notes on August 6, 2024.

What is the purpose of Ecopetrol's (EC) partial make whole of 2026 notes?

The partial make whole aligns with Ecopetrol's (EC) financial plan and demonstrates its commitment to proactively refinancing its 2026 maturities, potentially improving financial flexibility.