Fitch Ratings affirms Ecopetrol S.A.'s investment grade rating

Rhea-AI Summary

Ecopetrol, Colombia's largest company, has had its credit rating affirmed by Fitch Ratings at BBB- with a negative outlook. This rating reflects the company's strategic significance and strong financial profile amid declining oil prices in 2020. Fitch commended Ecopetrol's liquidity, cash generation, and access to capital markets. The company's strong connection to the Colombian government also influenced the rating. Ecopetrol operates extensively in Colombia and has activities in Brazil, Peru, and the U.S., alongside a notable presence in the biofuel sector.

Positive

• Affirmed credit rating at BBB- indicates solid financial standing.
• Strong liquidity profile supported by cash generation and market access.
• Resilience during international oil price decreases highlights business strength.
• Strategic importance to Colombia further reinforces market position.

Negative

• Negative outlook reflects broader economic uncertainties in Colombia.
• Credit rating is aligned with Colombia's sovereign rating, suggesting potential risks.

Bogotá D.C., Colobmia, Dec. 1, 2020 /PRNewswire/ -- Ecopetrol (BVC: ECOPETROL; NYSE: EC) reports that the rating agency, Fitch Ratings, has affirmed the Company's credit rating at BBB- with a negative outlook and its standalone credit profile (without incorporating government support) at bbb.

In its statement, Fitch highlighted the Company's strategic importance for the country, its ability to maintain a solid financial profile, as well as its resilience in confronting the decrease in international oil prices during 2020. Likewise, it emphasized its strong capital structure which provided the Company flexibility during the crisis.

The rating agency highlighted Ecopetrol's liquidity profile, supported by its cash generation, strong access to capital markets and adequate debt maturity profile.

Additionally, Fitch highlighted the Company's strong linkage to the Republic of Colombia. The negative outlook is in line with Colombia's sovereign rating (BBB-/ negative outlook).

Ecopetrol is the largest company in Colombia; it is a comprehensive oil chain company, one of the 40 largest oil companies in the world, and one of the top four in Latin America. In addition to Colombia, where it generates more than 60% of domestic production, it has exploration and production activities in Brazil, Peru and the United States (Gulf of Mexico). Ecopetrol owns the largest refinery in Colombia, most of the country's oil and pipeline network and is significantly increasing its participation in the biofuel sector.

This press release includes statements on business prospects, estimates for operating and financial results and statements related to Ecopetrol's growth prospects. All of them are projections and, as such, are based solely on its Director's expectations on the future of the Company and their continued access to capital in order to finance the Company's business plan. The future realization of these estimates depends on market behavior, regulations, competition, and performance conditions of the Colombian economy and industry, among other factors; and as such, they are subject to change without notice.

For more information please contact:

Juan Pablo Crane de Narváez
Head of Capital Markets
Phone: (+571) 234 5190
E-mail: investors@ecopetrol.com.co

Jorge Mauricio Tellez
Media Relations (Colombia)
Phone: (+ 571) 234 4329
E-mail: mauricio.tellez@ecopetrol.com.co

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SOURCE Ecopetrol S.A.

FAQ

What is Ecopetrol's current credit rating?

Ecopetrol's credit rating is affirmed at BBB-.

What does Fitch Ratings' negative outlook for Ecopetrol imply?

The negative outlook suggests potential risks and uncertainties affecting the company's financial stability.

How does Ecopetrol's credit rating affect investors?

A BBB- rating indicates a stable investment but with some risks, especially given the negative outlook.

What factors contributed to Ecopetrol's credit rating by Fitch?

Fitch highlighted Ecopetrol's strong liquidity, cash generation, and its strategic importance to Colombia.

Is Ecopetrol involved in international markets?

Yes, Ecopetrol has operations in Brazil, Peru, and the United States.