Ecopetrol SA may sell as much as 1 trillion pesos ($542.9 million) of bonds in the Colombian market as early as the week of November 22, according to Correval SA.
Ecopetrol, based in Bogota, may offer to sell inflation– linked, DTF interbank rate-linked or fixed-rate peso debt maturing in between three and 30 years, Laura Ramirez, a member of the sales group at Correval who is involved in managing Ecopetrol’s debt sale, said in a phone interview. Correval and Valores Bancolombia SA are the lead underwriters, she said.
“Ecopetrol has all the authorizations — the only thing pending is for the company to set an exact date,” Ramirez said. Ecopetrol is considering offering the securities in either the week of Nov. 22 or Nov. 29, she said. Ecopetrol declined to comment on the bond sale plans, according to a company official who asked not to be identified citing company policy.
The state oil company is tapping the local debt market for the first time since 1998 to help fund record investment amid rising oil demand in China, Chief Executive Officer Javier Gutierrez said in an interview last month. The company is also taking advantage of record-low interest rates in Colombia and increased liquidity to issue debt at a low cost, according to Francisco Chaves, a fixed-income analyst at brokerage Corredores Asociados in Bogota.
“Not only can Ecopetrol sell bonds at historically low rates, but the local market is probably willing to buy bonds at longer maturities than if it issues the debt abroad,” said Chaves. Corredores Asociados is also helping manage the Ecopetrol sale, he said.
Grupo de Inversiones Suramericana SA last year sold Colombia’s first 40-year corporate peso bonds.
Ecopetrol plans to invest more than $80 billion through 2020 to finance exploration projects in Colombia and expansion in neighboring Peru and Brazil, Gutierrez has said. The company’s planned 2011 investments are set to top this year’s record $6.9 billion in spending, according to Gutierrez.
Colombia’s central bank lowered the overnight lending rate in April to a record low 3 percent to buoy growth in South America’s fourth-largest economy.