Ecopetrol sells $1.2 bn in bonds in second sale this year

9/10/2014

Ecopetrol sells $1.2 bn in bonds in second sale this year

ANDREA JARAMILLO

BOGOTA, Colombia (Bloomberg) -- Ecopetrol tapped the overseas debt market for the second time this year with a $1.2 billion offering.

The company sold bonds due 2025 to yield 4.25%, or 1.75% points more than similar-maturity treasuries. Citigroup Inc. and JPMorgan Chase & Co. are managing the sale.

The oil producer’s offering comes after Colombian utility Empresas Publicas de Medellin sold bonds last week amid speculation that the Federal Reserve will raise interest rates next year. The average cost companies in developing countries pay to borrow is 5.07%, down from 6.05% a year earlier, according to a JPMorgan Chase & Co. index.

“Ecopetrol’s growth strategy is aggressive and could be challenging for the company,” Fitch Ratings said in a statement Sept. 9. It expected to rate Ecopetrol’s bonds BBB, the second-lowest level of investment grade.

Ecopetrol, based in Bogota, sold $2 billion of 31-year bonds in May to yield 5.92%, or 2.55% points more than similar-maturity treasuries.

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