The first foray of Colombian state-controlled oil company
Ecopetrol Thursday launched the sale of
maturity at a spread of 425 basis points over U.S. Treasurys, according to a
syndicate source. Total demand for the bonds was around
The bonds will be priced later Thursday, in a transaction managed by Barclays
Capital and JPMorgan.
The premium on the bonds is at the tighter end of initial guidance, set at
400-425 basis points over Treasurys.
“We expected 425 basis points over Treasurys; we have 410, which still gives
more than 100 basis points over local government bonds,” said
manages a fund of bonds at local brokerage Corredores Asociados and who is
buying those bonds.
since embarked on an ambitious investment program to more than double its
production of oil and natural gas by 2015.
The company, which used to invest less than
since raised spending dramatically and is projected to invest
2009, out of a
The firm has concentrated on exploration projects in
improving production and in acquisitions at home and abroad, mainly in
As a result,
equivalent a day from 385,000 barrels of oil equivalent a day in 2006. Its goal
is to reach 1 million of barrels of oil equivalent in 2015.
The company won’t be able to reach that goal if it doesn’t quickly find new
reserves in the many areas it now explores, analysts have said.
Until this year,
investment and had virtually no debt.
Before the floating of 10.1% of the company on the Colombian stock market,
affecting the government’s accounts.
Earlier this year, the company secured a 2.2 trillion Colombian pesos (
announced the company would seek
at DuPont Capital Management and who said he will be buying some of the
“Is it cheap? Probably not; but it is safe,” he said.
Additionally, investors have been seeking exposure to
has held up relatively well in the global economic crisis and the
bonds are a proxy to government bonds, Zhu said.
After the demand for the
demand for local government bonds increased,
local brokerage Nacional de Valores, said.
“The strong demand for
bonds in general,” he said. “Some people who won’t be able to buy as many
The yield on the benchmark peso-denominated government bond was down 8.973% at
The shares of
earlier in the session. The shares reacted to the price of oil, which was down
early Thursday morning and was recovering later in the day, Tovar said. (Dow Jones)