A.I. Candelaria ratings affirmed as dividend support underpins debt service profile

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A.I. Candelaria ratings affirmed

Highlights

A.I. Candelaria's 'BB-' ratings and USD950 million senior notes due 2028-2033 affirmed by Fitch Ratings, outlook remains Stable.
Dividend inflows from its 27.35% stake in OCENSA, projected at USD216 million annually, underpin debt service and support leverage trending to 3.0x by 2026.
Post-2025 tender offer and USD65 million prepayment will reduce outstanding 2028 notes to USD179 million and balloon payment to USD83 million, strengthening capital structure.

Dividend outlook and debt profile

As reported by Fitch Ratings, A.I. Candelaria's Long-Term Foreign and Local Currency Issuer Default Ratings and its USD950 million in outstanding notes are affirmed at 'BB-', with the notes maturing between 2028 and 2033 and the outlook remaining Stable.

The holding company's credit profile depends entirely on dividends from its 27.35% stake in Oleoducto Central S.A., or OCENSA, its only source of cash flow for debt service. Fitch says OCENSA's role as operator of Colombia's largest crude oil pipeline supports predictable cash generation, with its base case assuming average dividend receipts of USD216 million over the rating horizon.

Fitch also points to an improving capital structure after a 2025 tender offer and a USD65 million prepayment in the third quarter of 2025. Those steps reduce outstanding 2028 notes to USD179 million and lower the second-half 2028 balloon payment to USD83 million from USD113 million, while leverage is expected to trend toward 3.0x in 2026.

Structural constraints and operating significance

A.I. Candelaria remains exposed to structural subordination because its notes sit above debt at OCENSA, including OCENSA's USD400 million bond due in 2027. Fitch says that risk is partly offset by OCENSA's stable dividend capacity, A.I. Candelaria's influence over dividend policy and its veto rights over material capital expenditure and other key corporate decisions.

The agency adds that shareholder protections give A.I. Candelaria meaningful minority rights, including the ability to appoint two of five board members. A 90.1% shareholder vote is required to change OCENSA's dividend policy and other major business decisions, which Fitch says supports cash flow visibility and liquidity at the holding company.

Fitch's assumptions include 1% growth in OCENSA's ship-and-pay transported volumes over the rating horizon, current tariffs staying in place through 2026 and then rising 1% annually, and a dividend payout equal to 40% of annual EBITDA. The agency also assumes dividends remain contingent on meeting debt service reserve account requirements, with reserves covering 1.25x of the next debt service payment.

Earlier, we reported that Hainan Rubber proposed subordinated perpetual sustainable securities via Halcyon Agri, with Fitch flagging coupon deferral risk.

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