Exclusive: Mexico’s oil hedge to be pricier, but government likely doing it anyway

Exclusive: Mexico’s oil hedge to be pricier, but government likely doing it anyway

NEW YORK/MEXICO CITY (Reuters) - Mexico will have to pay more for less coverage under its giant oil revenue insurance policy for 2021, but will likely go ahead anyway to avoid further damaging its financial standing with international investors, sources said.. The hedge is designed to protect about one-fifth of Mexico's budget revenues, current and former Mexican finance and energy ministry officials said.. JPMorgan Chase & Co ( JPM.N ), Citigroup Inc ( C.N ), Goldman Sachs Group Inc ( GS.N ), BNP Paribas SA ( BNPP.PA ) and Shell ( RDSa.L ) are among those the finance ministry tapped to execute the hedge last year, sources familiar with the deal said.. Investors and credit rating agencies consider the hedge a measure of fiscal prudence that offsets oil market volatility.. Mexico is still rated investment grade, but all three major credit rating agencies - Fitch Ratings, Moody's Investors Service and S&P Global Ratings - downgraded the country this year, and could lower its rating in coming months.. With coronavirus lockdowns slamming demand in April, oil prices plunged to multi-year lows.. In the past, when oil prices were lower, Mexico has