(Bloomberg) — Ecopetrol SA is using a loan with Sumitomo Mitsui Banking Corporation to pay down other debt after it postponed the sale of bonds in the international market this week.
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Colombia’s state energy company said in a regulatory filing on Thursday it will pay off half of a $1 billion loan due in 2030 using an existing $250 million credit with Sumitomo Mitsui. The remainder will come from cash on hand.
The announcement comes after an eventful week that started with Ecopetrol launching an offer early on Tuesday for $1.75 billion of dollar bonds. It planned to use the proceeds to fund a debt buyback and prepay a portion of the 2030 loan. Terms were set, including a yield of 7.65%, but the deal never priced, and the sale was later postponed.
Ecopetrol didn’t immediately reply to a request for comment.
The delay came after Colombia’s electoral council opened a probe into an alleged breach of campaign finance limits during Gustavo Petro’s run for president in 2022. The probe involves Petro and Ecopetrol’s Chief Executive Officer Ricardo Roa, who managed the campaign before joining the company.
“Fixed income investors still view it as a classic quasi-sovereign instrument of state policy and are probably happy for the deal to be withdrawn and for it to come back with an extra 50 basis points of coupon in a few weeks,” said Roger Horn, a senior emerging-market strategist at Mariva Capital Markets.
“Ecopetrol is no worse of a credit because of these politically-related headlines,” he said.
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