Mexico Expanding Oil Hedge as Fuel Prices Float, Meade Says
- Cost likely similar to 2017 hedge; operations almost finished
- Catastrophe bond to trigger if quake size, location confirmed
Mexico's Meade on Catastrophe Bonds and Oil Hedge
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Mexico will most likely expand its oil hedge marginally for 2018 as it liberalizes gasoline prices, while the cost for the government to protect crude exports against a drastic drop in prices will be about the same as for this year, Finance Minister Jose Antonio Meade said.
The earthquake off Mexico’s coast last week should trigger a portion of the World Bank’s largest catastrophe bond if the location in Chiapas and its magnitude of 8.1 is confirmed, Meade said in an interview with Bloomberg News. The World Bank issued in August the bond of as much as $360 million against losses from tropical cyclones and earthquakes in Mexico.