S&P Lowers Ecopetrol's Rating to BB- Following Colombia's Sovereign Downgrade but Maintains Stable Outlook

TL;DR

S&P Global Ratings downgraded Ecopetrol's global credit rating from BB to BB- with a stable outlook.
The downgrade is a direct consequence of S&P's reduction in Colombia's sovereign debt rating to 'BB-' from 'BB'.
Ecopetrol's credit profile is limited by Colombia's sovereign rating due to its role in fiscal revenue generation and its connection to the National Government.
S&P's stable outlook for Ecopetrol reflects the sovereign's stable outlook, conditioning future reviews.
The agency noted that the government's tendency to maximize dividend payments, coupled with fiscal challenges, could restrict Ecopetrol's future financial flexibility.
In 2025, Ecopetrol distributed approximately $11.7 trillion in dividends, impacting its financial indicators.
Despite the global rating downgrade, Ecopetrol's individual credit profile was maintained at bb+, reflecting its operational performance.
S&P indicated a potential further downgrade if Colombia's sovereign rating deteriorates or if Ecopetrol's debt-to-EBITDA ratio exceeds 3.0 times.

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