Ecopetrol's Credit Rating Downgraded to BB- by S&P Global
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 09 2026
0mins
Should l Buy EC?
Source: PRnewswire
- Credit Rating Downgrade: S&P Global has downgraded Ecopetrol's global credit rating from BB to BB-, reflecting adjustments made to Colombia's sovereign credit rating, indicating the company's exposure to fiscal risks and economic vulnerabilities.
- Stable Outlook: Despite the downgrade, Ecopetrol maintains a stable outlook, underscoring its significance to the Colombian economy and its close relationship with the government, suggesting future ratings will align with Colombia's sovereign rating.
- Dividend Distribution Impact: In 2025, Ecopetrol distributed approximately COP 11.7 trillion in dividends to the government, resulting in a free cash flow to debt ratio of -5.0%, significantly below the expected 2.5%, highlighting the government's substantial influence over the company's cash flow.
- Investment and Transition: The company plans to allocate about 3.0% of its expected investments for 2026 towards Colombia's energy transition, supporting the development of cleaner energy sources, although ongoing fiscal challenges may constrain its future financial flexibility.
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Analyst Views on EC
Wall Street analysts forecast EC stock price to fall
2 Analyst Rating
0 Buy
1 Hold
1 Sell
Moderate Sell
Current: 13.550
Low
8.70
Averages
10.35
High
12.00
Current: 13.550
Low
8.70
Averages
10.35
High
12.00
About EC
Ecopetrol S.A. is an oil company. The Company operates in Colombia, Peru, Brazil and the United States Gulf Coast. The Company's segments include Exploration and Production, Transportation and Logistics, and Refining, Petrochemicals and Biofuels. The Company's Exploration and Production segment includes exploration, development and production activities in Colombia and abroad. The Company's Transportation and Logistics segment includes the transportation of crude oil, motor fuels, fuel oil and other refined products, including diesel and biofuels. The Company's main crude oil pipeline systems' operating capacity is approximately 1.34 million barrels per day (BPD). The Company's main refineries are the Barrancabermeja refinery, which it directly owns and operates, and a refinery in the Free Trade Zone in Cartagena that is operated by Reficar S.A., a subsidiary of the Company. The Company also owns and operates two other minor refineries: Orito and Apiay.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Timeline for Agreement: Trump expressed confidence that an agreement could be reached within one or two days.
Context of Negotiations: The discussions are part of ongoing efforts to resolve tensions between the U.S. and Iran.
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- Credit Rating Downgrade: S&P Global has downgraded Ecopetrol's global credit rating from BB to BB-, reflecting adjustments made to Colombia's sovereign credit rating, indicating the company's exposure to fiscal risks and economic vulnerabilities.
- Stable Outlook: Despite the downgrade, Ecopetrol maintains a stable outlook, underscoring its significance to the Colombian economy and its close relationship with the government, suggesting future ratings will align with Colombia's sovereign rating.
- Dividend Distribution Impact: In 2025, Ecopetrol distributed approximately COP 11.7 trillion in dividends to the government, resulting in a free cash flow to debt ratio of -5.0%, significantly below the expected 2.5%, highlighting the government's substantial influence over the company's cash flow.
- Investment and Transition: The company plans to allocate about 3.0% of its expected investments for 2026 towards Colombia's energy transition, supporting the development of cleaner energy sources, although ongoing fiscal challenges may constrain its future financial flexibility.
See More
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Iran's Stance on Talks: Iran has not agreed to hold the next round of talks with the United States, as reported by Tasnim News Agency.
Trump's Expectations: Former U.S. President Trump mentioned that U.S.-Iran negotiation representatives may meet this weekend, anticipating a final agreement to end the war.
Timeline for Agreement: Trump expressed confidence that an agreement could be reached within one or two days.
Context of Negotiations: The discussions are part of ongoing efforts to resolve tensions between the U.S. and Iran.
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- Credit Rating Downgrade: S&P Global has downgraded Ecopetrol's global credit rating from BB to BB-, reflecting adjustments made to Colombia's sovereign credit rating, indicating the company's exposure to fiscal risks and economic vulnerabilities.
- Stable Outlook: Despite the downgrade, Ecopetrol maintains a stable outlook, underscoring its significance to the Colombian economy and its close relationship with the government, suggesting future ratings will align with Colombia's sovereign rating.
- Dividend Distribution Impact: In 2025, Ecopetrol distributed approximately COP 11.7 trillion in dividends to the government, resulting in a free cash flow to debt ratio of -5.0%, significantly below the expected 2.5%, highlighting the government's substantial influence over the company's cash flow.
- Investment and Transition: The company plans to allocate about 3.0% of its expected investments for 2026 towards Colombia's energy transition, supporting the development of cleaner energy sources, although ongoing fiscal challenges may constrain its future financial flexibility.
See More
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- Credit Rating Adjustment: On April 8, 2026, S&P Global Ratings downgraded Ecopetrol's global credit rating from BB to BB-, reflecting the downgrade of Colombia's sovereign credit rating and highlighting the fiscal risks and economic vulnerabilities faced by the company.
- Stable Outlook: Despite the downgrade, Ecopetrol's outlook remains stable, aligning with Colombia's outlook, indicating the company's critical role in national fiscal revenue generation and its strategic importance in the energy transition.
- Financial Performance Impact: In 2025, Ecopetrol distributed approximately COP 11.7 trillion in dividends to the government, demonstrating its significant contribution to national finances, but resulting in a free cash flow to debt ratio of -5.0%, significantly below the expected 2.5%.
- Future Risks: Should Ecopetrol's financial performance continue to weaken or its debt-to-EBITDA ratio approach 3.0x, further rating downgrades could occur, reflecting constraints on the company's future financial flexibility.
See More
ECOPETROL SA NAMES JUAN CARLOS HURTADO PARRA AS INTERIM PRESIDENT
- New Appointment: Juan Carlos Hurtado Parra has been appointed as the acting president of Ecopetrol.
- Company Overview: Ecopetrol is a major Colombian petroleum company involved in the exploration and production of oil and gas.
See More
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- CEO Ouster: Ecopetrol's (EC) board removed CEO Ricardo Roa following corruption charges from Colombian prosecutors, highlighting the urgency for improved governance and accountability within the company.
- Legal Risks Intensify: Roa faces allegations related to influence peddling linked to a luxury apartment purchase in 2022, with potential additional charges for violating campaign spending limits, which could adversely affect the company's reputation and operations.
- Interim Leadership: COO Juan Carlos Hurtado will serve as interim CEO during Roa's leave until June 28, with a new president expected to be elected in August, potentially leading to a shift in the company's strategic direction.
- Union Pressure: The ousting follows pressure from Colombia's largest oil workers union, which threatened to strike unless Roa was dismissed, reflecting significant employee dissatisfaction with the company's governance and leadership.
See More
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- Loan Amount and Lenders: Ecopetrol has received approval for a loan of up to $1.25 billion from the Ministry of Finance, with participation from Banco Bilbao Vizcaya Argentaria, Bank of America, JP Morgan, and Bank of China, reflecting strong confidence from international financial institutions in its debt management strategy.
- Loan Purpose and Repayment Plan: The loan will be used to repay a $1.2 billion previous loan and $50 million of an outstanding balance, to be repaid in four equal installments over five years, aimed at optimizing the company's debt structure and reducing financing costs.
- Loan Terms and Risk Management: The loan agreement includes standard borrower default clauses, such as failure to pay principal or interest, ensuring that lenders can take action if the borrower's financial condition deteriorates, thereby enhancing the security of the loan.
- Company Background and Market Position: As Colombia's largest company, Ecopetrol accounts for over 60% of the country's hydrocarbon production and holds a significant position in the energy market across the Americas, with this financing expected to further solidify its market leadership.
See More
