Standard & Poor’s Ratings Services on Friday lifted Colombia’s state-owned oil company Ecopetrol SA (EC, ECOPETROL.BO) into investment-grade territory following a similar action on the South American country’s sovereign debt rating Wednesday.
American depositary receipts of the company were recently off 4 cents to $40.48 Friday.
Matching Wednesday’s upgrade on Colombia, S&P raised Ecopetrol’s rating a notch to BBB-, just within investment-grade territory. Both were given a stable outlook.
S&P assessed the company’s stand-alone credit profile at BB+, still within junk territory, but said the Colombian government would likely support the energy firm in the event of financial distress.
The government has an 89.9% ownership in Ecopetrol, which is the largest company in Colombia, S&P said.
The ratings agency based its sovereign debt upgrade on signs of widespread political support for market-oriented economic policies that have contributed to economic growth and growing investor confidence in recent years.
Fitch Ratings in October made a similar move, raising its outlook on the energy company days after boosting Colombia’s outlook on signs of a wider and more resilient improvement in the nation’s economy.