Fitch Ratings downgrades Ecopetrol S.A. following the same rating action on Colombia's sovereign rating

Rhea-AI Summary

Ecopetrol S.A. (NYSE: EC) announced a rating downgrade by Fitch Ratings, aligning with Colombia's sovereign downgrade. The company's foreign and local currency Issuer Default Ratings were lowered to BB+ from BBB-, with a Stable Outlook. Ecopetrol's stand-alone rating remains at bbb. The company is Colombia's largest, accounting for over 60% of the country's hydrocarbon production, and has significant interests in North American oil basins. The downgrade reflects broader economic conditions and potential impacts on Ecopetrol’s financial stability and growth prospects.

Positive

• Ecopetrol maintains a stand-alone rating of bbb, indicating a solid operational performance.
• The company holds over 60% of Colombia's hydrocarbon production, ensuring strong market presence.

Negative

• The downgrade to BB+ from BBB- may raise borrowing costs and affect investor confidence.
• The rating reflects risks tied to Colombia's economic performance and market conditions.

BOGOTA, Colombia, July 7, 2021 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) informs that, in line with the downgrade of the rating of the Republic of Colombia, Fitch Ratings has downgraded the company's foreign currency and local currency Issuer Default Ratings to BB+ from BBB- with a Stable Outlook. The company's stand-alone rating (without incorporating government support) is maintained at bbb.

Ecopetrol is the largest company in Colombia and one of the main integrated oil and gas conglomerates in Latin America, with more than 13,000 employees. It accounts for more than 60% of the hydrocarbon production in Colombia, and it owns the largest refineries and most of the country's oil-pipelines and multi-purpose pipelines network. It also participates in the commercialization of energy and in the distribution of gas. At the international level, Ecopetrol focuses on strategic basins on the American continent, with E&P operations in the United States (the Permian basin and the Gulf of Mexico), Brazil and Mexico. This press release contains statements relating to business prospects, estimates of operating and financial results, and Ecopetrol's growth prospects. All are projections, and therefore are based solely on management's expectations of the company's future and its continuous access to capital to finance its sales plan. Achieving these estimates in the future depends on its performance under given market conditions, regulations, competition, the performance of the Colombian economy and industry, and other factors; therefore, they are subject to change without prior notice.

For further details, please contact:

Head of Capital Markets
Tatiana Uribe Benninghoff
Phone: +571-234-5190
Email: investors@ecopetrol.com.co

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

 

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SOURCE Ecopetrol S.A.

FAQ

What was the recent rating change for Ecopetrol (EC)?

Fitch Ratings downgraded Ecopetrol's foreign and local currency Issuer Default Ratings to BB+ from BBB-.

What is Ecopetrol's current stand-alone rating?

Ecopetrol's stand-alone rating is maintained at bbb, despite the downgrade.

How does the downgrade affect Ecopetrol investors?

The downgrade may lead to higher borrowing costs and reduced investor confidence.

What percentage of Colombia's hydrocarbon production does Ecopetrol account for?

Ecopetrol accounts for over 60% of Colombia's hydrocarbon production.