Ecopetrol S.A. has reported that on December 30, 2011, the financial closing for issuance of a contingent guarantee to its subsidiary Refineria de Cartagena S.A. - Reficar S.A. was concluded, which is part of the financing granted by a group of export credit agencies and commercial banks for the expansion and modernization project of the Cartagena Refinery. The financing structure is a Project Finance, and comes to US$3.5 billion, with a maximum repayment period of 14 years, counting from the end of the six-month period following the termination date of the project.

The export credit agencies that form part of this transaction are US EXIM - Export-Import Bank of the United States, SACE spa- Servizi Assicurativi del Commercio Estero, EKN and the commercial banks are The Bank of Tokyo-Mitsubishi UFJ LTD, Banco Bilbao Vizcaya Argentaria S.A., HSBC Bank USA National Association and Sumitomo Mitsui Banking Corporation.

For purposes of financing this project, Ecopetrol S.A. has offered the lenders a contingent guarantee for payment of any amounts that Reficar S.A. may lack for debt servicing, with the following characteristics:.

i.Ecopetrol S.A. will provide the financial resources to its subsidiary Reficar S.A. if a deficit should arise in Reficar's resources for debt servicing. The amount guaranteed year to year corresponds only to the annual amount of the debt service.

ii.Ecopetrol shall assume all or part of the debt of Reficar S.A. in the event of the occurrence of certain circumstances provided in the financing documents, or in the event of deterioration of the credit of Reficar S.A. or Ecopetrol S.A.

iii.In the event of the occurrence of certain circumstances, Ecopetrol S.A. shall undertake to make full repayment of the debt owed to the creditors of Reficar S.A. iv.Ecopetrol S.A. has reserved the right to assume the debt of Reficar S.A. voluntarily and at any time.

This financing operation is relevant to the parties, not only because it is the largest operation made inColombia up to this time with export credit agencies, but also because it is the second largest transaction in the history of US EXIM, with direct majority funding from that institution.

As the transaction involves an operation of foreign debt, the respective prior approvals to enter into the contracts were obtained from the National Department of Planning, as well as from the Ministry of Finance, pursuant to what is set forth in Decree 2681 of 1993.

Tags: Ecopetrol S.A.