Enap confirms the solidity of its financial management with the placement of a bond for US$600 million in the international market

This is an automatic translation of the original release issued in Spanish

PRESS RELEASE from Enap
July 24, 2024

The National Petroleum Company (Enap) issued a bond for US$600 million in the international market, through an operation carried out today in New York, United States.

This bond issue aroused great market interest, with an offer book that reached US$4.8 billion with the participation of nearly 250 accounts, representing an excess demand of 8 times the size of the issue.

Enap will use the net proceeds from the issue for the public offer that will allow the repurchase of international bonds that the company maintains in the market with maturities in 2026 and 2031.

The objective is to extend the maturity profile of the company's debt through the refinancing of future maturities in a longer term than the original, without this implying an increase in Enap's debt level.

The general manager of Enap, Julio Friedmann, pointed out that “this bond issue reaffirms the positive evaluation that exists in the market regarding the action plan that we have defined as a company, which has allowed us to reduce our financial debt by US$1,000 million from 2022 and to be the only Latin American oil company that currently has investment grade. To continue along this line, during 2024 we will maintain the focus on strengthening our performance, operational discipline and cost containment, always putting care for people at the center. This view of financial responsibility is key to continuing to strengthen our role as an essential strategic public company for the country's energy supply."

For his part, Enap's Administration and Finance Manager, José Pablo Gómez, stated that “the success of this transaction reflects the market's confidence in the path of operational and financial discipline that the company is following. Regarding the latter, it is based on the appropriate management of the debt in terms of amounts and also terms.”

Operation features

This new bond was placed at a price of 187 basis points (bps) above the Treasury Bond rate (UST-10), which was trading at 4.28% at the time of placement, which implies a yield rate of 6.15%, 4 bps lower than the company's last issuance in 2023, in a market condition with a base rate almost 100 bps higher than that at that time.

The coupon rate of the bond was determined at 5.95% and the term of the transaction was 10 years with payment of semiannual interest and capital at the end of the period.

For this transaction, Bank of America , Itau BBA , JP Morgan , Santander and Scotiabank acted as placement agents and the law firms AO Shearman and Garrigues acted as international and local advisors for the company.