Milbank Represents Underwriters in $2.5 Billion Senior Notes Offering by Colombia’s Ecopetrol

19 Sep, 2013

In one of the largest corporate bond offerings in Latin America of 2013, Milbank, Tweed, Hadley & McCloy LLP has represented underwriters in a $2.5 billion offering of senior notes issued by Colombia’s state-owned and primary oil and gas producer and exporter Ecopetrol S.A.
 
The notes were offered in three separate tranches bearing interest rates of 4.250% due 2018; 875% due 2023; and, 7.375% due 2043. The underwriter group consisted of Bank of America Merrill and Morgan Stanley.
 
Ecopetrol is the largest crude oil and natural gas company in Colombia and the country’s only vertical producer –its operations extend from exploration and production to refining, transportation, distribution and marketing, as well as related products such as petrochemicals.  The company’s output accounted for some 62% of Colombia’s crude oil production in 2012 and 10% of natural gas.  It was established in 1951 and remains majority owned by the Colombian government.
 
In recent years Ecopetrol has embarked on an ambitious expansion plan, aiming to become one of the leading companies in the global oil industry.  The company intends to use proceeds of the bond sale to further its strategic growth plan, including its objective to achieve a production output of 1 million “clean barrels” of oil per day by 2015 and 1.3 million barrels daily by 2020.
 
“In recent years Ecopetrol has become one of the key energy producers in the Americas and the company has the resources and management in place to become a major global player,” said Milbank Securities partner Carlos Albarracin, who led the deal team. “We’re very pleased about our role as underwriter counsel to BAML and Morgan Stanley in bringing Ecopetrol’s landmark debt offering to market at what is turning out to be an opportune time.”
 
In addition to Mr. Albarracin, Milbank head of the Global Securites Group Marcelo Mottesi, tax partner Andrew Walker and associates Jennifer Beaudry, Kaveh Namazie and Pablo Echeverri represented the underwriters.  The Ecopetrol deal comes on the heels of Milbank’s role advising underwriters in Verizon Communication’s $49 billion sale of senior notes – the largest corporate bond offering on record. 

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