Ecopetrol inks US$665mn financing deal

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Tuesday, September 11, 2018

Colombia's state-run oil company Ecopetrol has secured US$665mn in contingent financing as part of its integral debt management strategy.

Scotiabank will provide up to US$430mn while Mizuho Bank has committed US$235m, Ecopetrol said in a statement.

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The Bogotá-based company said the credit line would be tapped under "terms and conditions previous agreed."

"This facility would only increase the level of indebtedness of the company until such time as disbursements are made," it said.

The credit will be available for two years with a five-year maturity period. Interest will be charged at the benchmark six-month Libor rate plus 125 basis points and a commission of 30 basis points per year on capital not disbursed, Ecopetrol said.

"The resources ... may be used for general corporate purposes, including strengthening [our] liquidity position in the event of possible growth opportunities, mitigating the risks associated with unexpected fluctuations in crude oil prices, as well as to reduce specific refinancing needs in the coming years with flexibility and low borrowing costs," the company added.