31-year notes take advantage of lowest long-term borrowing costs in a year; Milbank also advised on Ecopetrol’s $2.5B offering last September, one of largest Latin American issuances of 2013
Details of Ecopetrol’s $2B Note Issuance
Milbank, Tweed, Hadley & McCloy LLP represented underwriters Goldman Sachs and Deutsche Bank Securities in a $2 billion issuance of 31-year notes by leading Colombian oil and gas company Ecopetrol SA. It’s the second multi-billion dollar debt offering by Ecopetrol since last September, another sign of surging investor interest in Colombia, which recently overtook Argentina as South America’s second-largest economy.
Goldman Sachs and Deutsche Bank Lead Offer
Global Securities partner Carlos Albarracín led the Milbank team in the latest transaction, in which Goldman and Deutsche Bank placed $2 billion of the 5.875% notes due May 2045. Mr. Albarracín noted that demand was strong enough that Ecopetrol was able to lower the coupon by nearly 200 basis points (compared to Ecopetrol’s 2013 20-year notes), and issue only one tranche of 31-year notes. The deal closed on May 28.
Carlos Albarracin
Use of Proceeds and Company Profile
Ecopetrol, the largest oil and natural gas company in Colombia and supplier of nearly two-thirds the country’s crude oil supplies, is expected to use proceeds from the latest offering for general corporate purposes, including capital expenditures. Established in 1951, Ecopetrol is Colombia’s only vertical oil/gas producer, its operations extending from exploration and production to refining, transportation, distribution and marketing; it also operates in the petrochemical field.
Context: Previous $2.5B Ecopetrol Offering
In September 2013, Ecopetrol issued a three-tranche bond offering totaling $2.5 billion, one of the largest Latin American corporate debt issues for the year. Milbank represented Bank of America Merrill Lynch and Morgan Stanley as underwriters in that transaction.
“Ecopetrol is taking strategic advantage of low long-term borrowing rates to tap international markets as part of its multi-year plan to expand globally,” said Mr. Albarracín. “Investor confidence in the company remains high as it has grown into one of the key oil and gas players in Latin America. We’re pleased to have once
again played a key role in such a significant capital markets offering out of Colombia.”
Milbank Team Members and Legal Advisors
Mr. Albarracín was assisted by Securities associates Jennifer Beaudry and Pablo Echeverri; Tax partner Andrew Walker and associate Erika Hauser; Washington DC- based partner Dara Panahy and associate Bijan Ganji; and international attorney Juan Turner.
