Ecopetrol to execute $1.2B debt management transaction

Ecopetrol informed that, as part of its comprehensive debt management and maturity refinancing strategy, the Ministry of Finance and Public Credit, or MHCP, through Resolution 0652 of March 20, has approved the execution of a loan of up to $1.2B. The loan will be executed by and among Ecopetrol, as borrower. The term of the loan will be five years; principal will be repaid at maturity; and interest will be subject to a variable rate previously agreed by the parties. The loan was approved by the MHCP, given Ecopetrol’s request to refinance the $1.2B outstanding under a previously-executed loan authorized by Resolution 1824 of July 30, 2021, and which expired on August 16, 2023. Such loan authorized in 2021 was disbursed on September 29, 2022 to refinance the debt contracted for the acquisition of Interconexion Electrica S.A. In order to obtain the loan, the Company complied with all the required internal and external procedures and approvals. Pursuant to Colombian regulation, the MHCP reviewed and authorized the terms of the agreement, which provide for events of default by the borrower, such as failure to make timely payments of principal and interest, possible impairment of the borrower’s ability to pay, impairment of the integrity of the borrower’s financial information, and failure to comply with contractual obligations, among others, which are frequently used in transactions of this nature. Should any of these events materialize, lenders would be entitled to claim early repayment of the debt, according to the procedure foreseen in the contract. Likewise, the loan agreement establishes Ecopetrol’s right of recourse against the lenders when they fail to make disbursements under the terms of the loan. All of the above, in accordance with the law of the State of New York, which is the governing law of the agreement.