S&P Global Ratings Adjusts Ecopetrol's Credit Rating Amid Colombia's Sovereign Downgrade

S&P Global Ratings Adjusts Ecopetrol's Credit Rating



On June 27, 2025, the renowned credit rating agency S&P Global Ratings announced a downgrade of Ecopetrol S.A.'s global credit rating, altering it from BB+ to BB while maintaining a negative outlook. This decision is closely aligned with the previous downgrade of the Republic of Colombia's sovereign credit rating on June 26, 2025. In addition to this downgrade, S&P affirmed Ecopetrol's Stand-Alone Credit Profile (SACP) at bb+.

The report from S&P emphasized that the downgrade of Ecopetrol’s rating was directly influenced by the downgrade of Colombia’s sovereign rating, which highlights the critical role Ecopetrol plays in the national economy. Recognized as a significant contributor to national revenues and a government-related entity, Ecopetrol's standing is pivotal not only to the energy sector but also to the economic stability of Colombia. The negative outlook for Ecopetrol reflects the same outlook for the sovereign’s credit rating.

Expectations and Projections



Regarding the company's financial metrics, S&P forecasts that Ecopetrol will manage to maintain its leverage ratio (debt/EBITDA) within the range of 2.0x to 2.5x, accompanied by an EBITDA margin approaching 40%. These parameters are vital as they illustrate the company's operational efficiency and profitability amid the competitive energy market.

Furthermore, S&P praised Ecopetrol's strategic plan for 2040, which is focused on enhancing growth opportunities, ensuring the replacement of reserves, maintaining high operational availability for refineries, and diversifying investment portfolios through broader business initiatives. These efforts underline Ecopetrol's commitment to adapt to the evolving energy landscape while positioning itself favorably for future challenges.

Role and Impact of Ecopetrol



Ecopetrol stands as Colombia's largest enterprise and is one of the most significant integrated energy companies across the Americas, employing over 19,000 individuals. The company is responsible for a staggering 60% of the nation’s hydrocarbon production, encompassing various sectors like transportation, logistics, and refining. Its influential role extends into the petrochemical and gas distribution arenas within Colombia as well.

With an aggressive strategy that includes the acquisition of 51.4% of ISA’s shares, Ecopetrol participates in multiple domains, including energy transmission and management of real-time systems through XM. Additionally, it has made headway in the Barranquilla-Cartagena coastal highway concession, which further cements its infrastructure footprint.

Internationally, Ecopetrol’s footprint spans across strategic basins in the Americas, with drilling and exploration operations notably in the United States (focused on the Permian basin and Gulf of Mexico), Brazil, and Mexico. Through ISA and its subsidiaries, the company boasts significant positions within power transmission in Brazil, Chile, Peru, and Bolivia, as well as road concessions in Chile and involvement in the telecommunications sector.

Conclusion



This recent adjustment in credit ratings underscores the interconnected nature of sovereign credit ratings and corporate creditworthiness, particularly for companies like Ecopetrol that are deeply integrated into the national economy and face external market conditions. As market environments evolve, so do the challenges and opportunities that lie ahead for Ecopetrol. Stakeholders and investors will keep a keen eye on how the company navigates these changes in light of its ambitious growth strategies and operational initiatives aimed at sustaining its pivotal role in the energy sector both locally and internationally.

For more information regarding this rating action, interested parties may refer to the full report available through S&P Global Ratings.

Topics Financial Services & Investing)

【About Using Articles】

You can freely use the title and article content by linking to the page where the article is posted.
※ Images cannot be used.

【About Links】

Links are free to use.