Ecopetrol Tightens Triple Bond Offer

Ecopetrol’s first international bond sale since 2009 raised $2.5bn, with the issuer tightening pricing 20bp-40bp from Tuesday’s initial indications across three tranches and seeing gains in initial secondary trading. Capitalizing on scarcity of triple-B Colombian credits, the state-controlled oil company was heard receiving more than $12bn in orders, including $300m-$400m reverse inquiry for the 30-year tranche added to the initially planned 5 and 10-year offerings. The $350m 2018 priced at 99.559 with a 4.25% coupon to yield 4.349%, or UST+260bp, the tight end of 270bp-area guidance and 300bp-area initial price talk. A $1.3bn 2023 priced at 99.033 with a 5.875% coupon to yield 6.005%, or UST+305bp, inside 315bp-area guidance and earlier 325bp-area talk. The $850m 2043 priced at 99.474 with a 7.375% coupon to yield 7.419%, or UST+350bp, tight to the 360bp-area guidance and earlier 375bp-area talk. The trio were initially up in the aftermarket Wednesday, with the 5-year reaching 100.75, the 10-year at 101.25 and the 30-year at 102.75, according to a trader. “The company is one of the best run oil and gas companies. They didn’t offer much for the 5-year, but did offer a little bit on the 10s and 30s,” says a trader who spotted Colombia’s 2019 bonds at a g-spread level of 268bp. “Ecopetrol ticked a lot of boxes and people are comfortable with rates on 10s and 30s,” says one investor who found the 30-year tranche pricing 20bp wide to Petrobras’ 2043 bond and calculated at least 100bp pickup to the Colombia sovereign on the 5s and 10s. Ecopetrol’s 2019 bonds, considered somewhat illiquid, were seen by bankers on the deal as trading as high as a g-spread level of 290bp Tuesday. They saw Ecopetrol offering negative new issue premium on the 5-year and say it received $4.5bn in demand from 294 accounts, while the 10-year offered flat to 5bp new issue premium and drew $5.2bn in demand from 280 accounts. The 30-year drew $2.3bn in demand from 166 accounts. Ecopetrol is carryi