Fitch Ratings Raises Ecopetrol Credit Rating to BBB
New York-based credit rating agency Fitch Ratings recently raised its rating for Colombian state-controlled oil company Ecopetrol S.A. (NYSE: EC) (BVC: ECOPETROL) from BBB- to BBB with a stable outlook.
The new standalone rating is two notches above junk and aligns with the big three rating agency’s sovereign rating for Colombia.
“The increase in the stand-alone credit profile is a recognition of the company’s stable operating performance, the soundness of its business plan, its solid financial profile achieved through its debt management strategy, and the reasonableness of the dividend policy it has implemented,” said Ecopetrol in a statement about the change.
Among the specific factors noted by Fitch Ratings are Ecopetrol’s stable credit profile and debt situaion. The company had a debt-to-earnings (EBITDA) ratio of 1.3x and a debt-to-reserves ratio of $8 USD per barrel at the close of the third quarter. Both of these figures have improved during the past two years, noted Ecopetrol.
READ MORE: Ecopetrol Reports Big Jump with Profits of $866 Million in the Third Quarter
Ecopetrol has also further shored up its balance sheet by procuring a $665 million USD contingent line of credit with Scotiabank and Mizuho that would give it more balance-sheet protection against oil prices that fall even further or other challenging economic conditions that cut into revenue.
Send to KindleComments
