By Mary-Katherine Stinson and Cristal Cody
Lexington, Ky., June 29 – Ecopetrol SA sold $1.5 billion across two tranches of dollar-denominated fixed-rate senior notes (Baa3/BB+/BB+), one tranche being an add-on to its 8 7/8% senior notes due 2033, according to 6-K and FWPs filed with the Securities and Exchange Commission and a market source.
The $1.2 billion of 8 5/8% senior notes due Jan. 19, 2029 priced at 99.993 to yield 8 5/8%, or at Treasuries plus 465.8 basis points. The notes were talked in the 8.8% area.
The $300 million of additional 8 7/8% senior notes due Jan. 13, 2033 priced at 99.208 minus $517,708.33 in interest that will accrue from July 6 to July 13, to yield 9%, or at Treasuries plus 529 bps. The notes were talked in the 9¼% area.
The 2029 notes have a make-whole call option until Dec. 19, 2028 at Treasuries plus 50 bps, followed by a par call option as well as change-of-control protection at 101 plus interest.
As with the original issue, the 2033 add-on notes have a make-whole call option in whole or in part anytime at Treasuries plus 50 bps. On or after Oct. 13, 2032, they are callable at par.
The 2033 additional notes will be fully fungible with the $2 billion of 8 7/8% notes issued on Jan. 13.
J.P. Morgan Securities LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc. are acting as bookrunners of the deal.
The deal was 2.5x oversubscribed, with the order book reaching more than $3.8 billion. Around 200 investors from the United States, Europe, Asia and Latin America participated.
The notes will be listed on the New York Stock Exchange.
The proceeds will be used to finance the company’s 2021-2023 investment plan and/or to finance other expenditures.
The Bogota, Colombia-based petroleum company is 88.49% government-owned.
| Issuer: | Ecopetrol SA
|
| Amount: | $1.5 billion
|
| Issue: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc.
|
| Trustee: | Bank of New York Mellon
|
| Counsel to issuer: | Shearman & Sterling LLP (New York law) and Brigard & Urrutia Abogados SAS (Colombian law)
|
| Counsel to bookrunners: | Milbank LLP (U.S. law) and Gomez-Pinzon Abogados SAS (Colombian law)
|
| Pricing date: | June 28
|
| Settlement date: | July 6
|
| Ratings: | Moody’s: Baa3
|
| S&P: BB+
|
| Fitch: BB+
|
| Distribution: | SEC registered
|
|
|
| 2029 notes
|
| Amount: | $1.2 billion
|
| Maturity: | Jan. 19, 2029
|
| Coupon: | 8 5/8%
|
| Price: | 99.993
|
| Yield: | 8 5/8%
|
| Spread: | Treasuries plus 465.8 bps
|
| Call features: | Make-whole call until Dec. 19, 2028 at Treasuries plus 50 bps; after at par
|
| Price talk: | 8.8% area
|
| Cusip: | 279158AT6
|
|
|
| 2033 add-on
|
| Amount: | $300 million
|
| Maturity: | Jan. 13, 2033
|
| Coupon: | 8 7/8%
|
| Price: | 99.208 minus $517,708.33 in interest that will accrue from July 6 to July 13
|
| Yield: | 9%
|
| Spread: | Treasuries plus 529 bps
|
| Call features: | Make-whole call until Oct. 13, 2032 at Treasuries plus 50 bps; after at par
|
| Price talk: | 9¼% area
|
| Cusip: | 279158AS8
|
| Total issue: | $2.3 billion, including $2 billion of notes issued on Jan. 13
|
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