Ecopetrol S.A. announces full redemption of its Notes due 2026

Rhea-AI Summary

Ecopetrol (NYSE: EC) has announced the full redemption of its outstanding 5.375% notes due June 2026. The redemption, scheduled for November 21, 2024, covers USD 447,168,000 in outstanding notes. The redemption price is expected to be USD 1,010.31 per USD 1,000 principal amount, plus accrued interest of USD 21.35 per USD 1,000, totaling approximately USD 461.3 million. This action aligns with the company's financial plan and debt management strategy.

Positive

• Proactive debt management through early redemption of 2026 notes
• Strong financial position enabling full redemption of USD 447.2 million in notes

Negative

• Additional cost of USD 14.6 million (premium over par value) for early redemption

Insights

Financial Analyst

This early redemption of $447.17 million in 2026 notes demonstrates proactive debt management by Ecopetrol. The company will pay a 1.03% premium over par value plus accrued interest, resulting in a total payment of approximately $461.33 million. While this involves a slight premium, it's a strategic move to optimize the debt structure ahead of maturity.

The decision likely reflects either favorable cash positions or access to lower-cost refinancing options. By addressing this debt obligation 19 months before maturity, Ecopetrol reduces refinancing risk and potentially its overall interest expense. This aligns with prudent financial management practices, particularly given the current interest rate environment and the company's position as Colombia's largest energy firm.

BOGOTA, Colombia, Oct. 29, 2024 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) ("Ecopetrol" or the "Company") announces that, continuing with its comprehensive debt management strategy, it will redeem the outstanding balance of its 5.375% notes maturing in June 2026 (CUSIP: 279158 AL3 / ISIN: US279158AL39) (the "2026 Notes"), which were issued in 2015. The outstanding balance of the 2026 Notes is USD 447,168,000.

The expected redemption date of the 2026 Notes is November 21, 2024. The redemption price is expected to be approximately USD 1,010.31 per USD 1,000.00 principal amount outstanding (preliminarily calculated at USD 451,778,154.18 for 100% of the 2026 Notes outstanding), plus accrued and unpaid interest up to the redemption date equivalent to USD 21.35 per USD 1,000 principal amount outstanding (estimated at USD 9,547,347.33 for 100% of the 2026 Notes outstanding), which would amount to USD 1,031.66 per USD 1,000 principal amount outstanding (approximately USD 461,325,501.51 for 100% of the 2026 Notes outstanding). The final redemption price is expected to be calculated on November 18, 2024.

The redemption of the 2026 Notes is in line with the Company's financial plan and confirms Ecopetrol's commitment to proactively manage its debt maturing in 2026.

For more information, please refer to this link.

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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)
Lina María Contreras Mora
Email: investors@ecopetrol.com.co

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

View original content:https://www.prnewswire.com/news-releases/ecopetrol-sa-announces-full-redemption-of-its-notes-due-2026-302290003.html

SOURCE Ecopetrol S.A.

FAQ

What is the redemption price for Ecopetrol's (EC) 2026 Notes?

The redemption price is USD 1,010.31 per USD 1,000 principal amount, plus USD 21.35 in accrued interest, totaling USD 1,031.66 per USD 1,000 principal amount.

When will Ecopetrol (EC) redeem its 2026 Notes?

Ecopetrol will redeem the 2026 Notes on November 21, 2024.

What is the total value of Ecopetrol's (EC) 2026 Notes redemption?

The total redemption value is approximately USD 461.3 million, including principal and accrued interest.