Colombia’s national oil company has opened $1.75 billion in trades on the international bond market while moving to buy back its bonds for the second time this year.
Ecopetrol SA is selling dollar notes that mature in about seven years to fund the buyback of existing bonds due in 2026 and the prepayment of loans. The new bonds will be priced on Tuesday and are expected to yield about 7.65%, the people said on condition of anonymity.
Fitch Ratings rated the bonds “BB+,” one notch below investment grade. The company’s American Depositary Receipts closed 4.3% lower in New York trading, while its bonds due in 2026 rose after the announcement in a regulatory filing, according to index prices compiled by Bloomberg.
Ecopetrol last sold foreign bonds in January, raising $1.85 billion to fund the purchase of short-maturity bonds.
The offer comes as the state-owned drilling company invests heavily in offshore exploration as the Andean country struggles to overcome natural gas shortages expected to begin next year.
Equity analysts have questioned Ecopetrol’s decision earlier this year to withdraw from a deal to buy a stake in Texas shale oil assets from Occidental Petroleum Corp. for $3.6 billion, a move that comes after the company Two directors resigned.
The repurchase offer expires on October 15th at 5:00 pm New York time. BBVA Securities Inc., JPMorgan Securities and Santander US Capital Markets are managing the new transaction.
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