Columbia's largest company, Ecopetrol (NYSE: EC ) , said this morning that Fitch Ratings maintained its international ratings for the company's local and foreign currency at BBB and BBB-, respectively, and has revised the rating outlook from "stable" to "positive." The action occurred on Friday.
The rating action affects approximately $1.5 billion of notes outstanding.
The government of Colombia owns 88.5% of Ecopetrol's business. Fitch recently upgraded Colombia's ratings, so this helped lead to its upgrade to "positive" on the company, which Fitch said also has a strong financial profile and improving production levels.
Fitch expects Colombia to become a net sovereign external creditor in 2013 because of its continued international reserve accumulation. Moreover, the government's debt burden continues to decline as "fiscal consolidation and economic growth" work in tandem to allow debt to fall to an estimated 36.3% of GDP in 2012, said Fitch, in line with its estimates.
As a result, Fitch affirmed Ecopetrol's foreign currency and local currency issuer default ratings that affect approximately $1.5 billion of notes outstanding. Fitch has also affirmed Ecopetrol's national short- and long-term issuer default ratings at F1+ and AAA, respectively.
Fitch says further upgrades could result from an upgrade of Colombia's ratings coupled with continued strong operating and financial performance, though a downgrade is possible if Colombia's sovereign ratings are downgraded or conditions otherwise deteriorate.
Ecopetrol is one of the 50 largest oil companies in the world.