Ecopetrol S.A. Completes Redemption of its 5.375% Notes due 2026

Rhea-AI Summary

Ecopetrol (NYSE: EC) has completed the early redemption of its 5.375% notes due 2026. The company paid USD 1,007.63 per USD 1,000 of principal, totaling USD 450,579,892 plus accrued interest. This strategic move eliminates all outstanding amounts of these notes and reduces the company's refinancing risk until 2028. The action aligns with Ecopetrol's financial plan and previous announcements made in October 2024 regarding the proactive management of 2026 maturities.

Positive

• Complete elimination of 2026 notes reduces refinancing risk until 2028
• Proactive debt management demonstrates strong financial planning

Negative

• Premium payment of USD 7.63 per USD 1,000 of principal on early redemption
• Significant cash outlay of USD 450.6 million impacts liquidity

Insights

Financial Analyst

This early bond redemption represents a strategic financial move by Ecopetrol. The company paid a $450.6 million premium of $7.63 per $1,000 principal, demonstrating strong liquidity management. By eliminating the 5.375% notes due in 2026, they've effectively cleared their debt obligations until 2028, providing significant financial flexibility.

The timing is particularly strategic given current market conditions and interest rate environment. This proactive debt management strengthens the company's balance sheet and could potentially lead to improved credit ratings. The slight premium paid is justified by the elimination of refinancing risk and potential future interest savings, especially if rates remain elevated.

BOGOTA, Colombia, Nov. 21, 2024 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) (the "Company") informs that today it completed the redemption of the aggregate principal amount outstanding of its 5.375% notes due 2026, which were originally issued in 2015. The repurchase price of this bond was USD 1,007.63 for each USD 1,000 of principal outstanding, amounting to USD 450,579,892 for the aggregate principal amount outstanding, plus accrued interest up to the date.

With this early payment, the aggregate principal amount outstanding of the Company's 5.375% notes due 2026 has been completely redeemed, mitigating the Company's refinancing risk until 2028. This action aligns with the objectives of the financial plan and reaffirms Ecopetrol S.A.'s commitment to proactively manage the refinancing of maturities in 2026, as previously announced by the Company on October 22 and 28, 2024, through communications published via this same medium.

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
Carolina Tovar Aragón
Email: investors@ecopetrol.com.co

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

View original content to download multimedia:https://www.prnewswire.com/news-releases/ecopetrol-sa-completes-redemption-of-its-5-375-notes-due-2026--302313816.html

SOURCE Ecopetrol S.A.

FAQ

What was the redemption price for Ecopetrol's (EC) 2026 notes?

Ecopetrol paid USD 1,007.63 for each USD 1,000 of principal outstanding on its 5.375% notes due 2026.

How much did Ecopetrol (EC) pay in total for the 2026 notes redemption?

Ecopetrol paid a total of USD 450,579,892 plus accrued interest for the complete redemption of the 2026 notes.

When is Ecopetrol's (EC) next major debt refinancing due after this redemption?

Following this redemption, Ecopetrol's next major refinancing requirement is not until 2028.