Press Esc to close


World Oil News Center

Ecopetrol sold $2 billion of 31-year bonds after yields drop


BOGOTA, Colombia (Bloomberg) -- Ecopetrol sold $2 billion of 31-year bonds as borrowing costs for longer-dated debt fall to the lowest in almost a year.

Finance Minister Mauricio Cardenas told reporters in Bogota on May 20 that the offering was a “total success.” The oil company sold the securities to yield 5.92% more than similar-maturity Treasuries. Deutsche Bank and Goldman Sachs Group managed the sale.

The new bonds will be rated BBB, the second-lowest investment grade and in line with Colombia’s government, Fitch Ratings said in a statement. The average cost companies in developing countries pay to borrow for more than 10 years is about 6.5%, the lowest level since June 2013, according to JPMorgan Chase & Co.’s CEMBI Broad index.

“The yield seems quite tight in our opinion and still the issue seems to be in great demand,” Jennifer Stubbert, a fixed-income trader at Credit Agricole’s Miami brokerage unit, said in an emailed response to questions. “I would expect any investment-grade corporate credit to be well received. In the case of Ecopetrol you also have the government credit behind it, and it’s a well known issuer.”

The offering follows a surge in corporate bond sales across emerging markets as long-term borrowing costs for companies in developing markets fall. The oil company will use the funds to help pay for its $68.5 bn capital expenditure program for 2014-2020, Fitch said in a statement.

Ecopetrol last tapped international markets in September, when it sold $2.5 bn of debt due in 2043, 2023 and 2018. The yield on the bonds due in 2023 have fallen 0.6% point this year to 4.51%.



Bookmark and Share



Engineering Data Tables

World Oil's specialized upstream Engineering Data Tables featuring the Drill Bit Classifier, Tubing Tables and more. Get Total Access today.


2013 Fracturing Technology

2013 Fracturing Technology


By Digital Publisher

Drill Bit Classifier World Oil published its renowned Drill Bit Classifier in September 2013. The Drill Bit Classifier is a comprehensive listing of major manufacturers' d...