...The credit profile of the Municipality of Lima (Baa2 negative) reflects its positive operating margin, offset by cash financing deficits resulting from the city's ambitious infrastructure plan, which has been financed through debt and available liquidity. During 2021, Lima's operating margin improved (17.2% of operating revenue) as a result of an 8.2% increase in operating revenue and a 4.6% decrease in operating expenses. Additionally, the city pursued its planned infrastructure program, leading to a significant cash financing deficit of 17.6% of total revenue during 2021, financed through available liquidity. As a result, cash/current liabilities decreased to 0.7x from 1.4x, the main credit challenge of Lima. We expect Lima to continue posting cash financing deficits during 2022 and 2023 of around 20% of total revenue, on average, financed through additional debt. Net direct and indirect debt could increase to 73% of total revenue by year-end 2023....