Ecopetrol plans to sign a contingent line of credit for $665 million with Scotiabank ($430 million) and Mizuho Bank ($235 million) as part of its integral debt management strategy.

Under the committed line of credit, Scotiabank and Mizuho Bank will disburse funds as and when Ecopetrol requires them, under terms and conditions previously agreed between the parties. The facility would increase the company’s indebtedness only when the disbursements are made.

The contingent line will have a two year availability period for disbursements, subject to principal amortizable upon maturity after a five-year term as from the signing date of the agreement and an interest rate of 6-month LIBOR + 125 basis points and an annual fee of 30 basis points on principal not disbursed during the availability period.

The facility may be used for general corporate purposes, including strengthening Ecopetrol’s liquidity position in the face of eventual growth opportunities, mitigating risks associated with unexpected fluctuations in crude prices and reducing refinancing needs in the coming years.

To obtain the line of credit, Ecopetrol complied with all required internal and external procedures and approvals.

Ecopetrol is the largest primary petroleum company in Colombia and was ranked at 346 on the Fortune Global 500 in 2012.