Moody's downgrades Lima's rating to Baa3 and its BCA to ba1; outlook stable

Lima, Municipality of: Pre-Sale Report - PEN1,205 million senior notes guaranteed by cash flows issued through a trust - Credit Opinion – 2023/12/08 – US$ 250.00 – ...On November 23, Moody's Investors Service (Moody's) assigned a Baa2 rating to the PEN1,205 million ($335 million) Senior Notes guaranteed by cash flows issued through a trust constituted under the laws of the Republic of Peru and registered in the U.S. in accordance with rule 144A/RegS for funding the Municipality of Lima (Issuer Rating Baa3, BCA ba1, positive). The Baa2 rating assigned to the senior notes guaranteed by cash flows is one notch above that of the Municipality, reflecting our view of the stable and predictable nature of the cash flows assigned to the trust, the significant cushion of expected cash flows compared to the debt service, and the very strong legal protections embedded in the transaction that includes bankruptcy remoteness and irrevocable instructions from Lima to the collection agents. The proposed transaction lengthens the municipality's debt profile, with a sculpted fully amortizing principal schedule to achieve an average debt service coverage ration ("DSCR")...

Moody's assigns Baa2 to Lima's new Sr. Notes guaranteed by cash flows; revises outlook to positive - Rating Action – 2023/12/08 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

Lima, Municipality of: Update following rating downgrade - Credit Opinion – 2023/06/09 – US$ 250.00 – ...The credit profile of the Municipality of Lima (Baa3 stable) reflects its economic strength that results in high own-source revenue and strong gross operating margins, balanced by a weak liquidity position and the historical volatility of cash financing surpluses. The municipality's Baa3 rating results from a baseline credit assessment (BCA) of ba1 along with an assumption of a strong level of extraordinary support from the Government of Peru (Baa1 negative) in case of need. The strong level of support takes into consideration that Lima is the capital city with 30% of Peru's population, and 44% of its gross domestic product. In 2022, Lima's operating balance recovered to its pre-pandemic levels, while also decreasing its capital expenditure program, resulting in a cash financing surplus of 19% of total revenues. The declining debt burden is also a credit strength. Nonetheless, the debt structure is mostly due in the short-term, with 45% of the debt outstanding maturing through December...

Lima, Municipality of: Update to credit analysis - Credit Opinion – 2023/02/13 – US$ 250.00 – ...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....

Lima, Municipality of: Update following outlook change to negative - Credit Opinion – 2022/09/21 – US$ 250.00 – ...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....

Moody's changes Lima's outlook to negative from stable; affirms Baa2 rating - Rating Action – 2022/09/01 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

Lima, Municipality of: Update to credit analysis - Credit Opinion – 2022/03/16 – US$ 250.00 – ...The credit profile of the Municipality of Lima (Baa2 stable) 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 2020, Lima's operating margin deteriorated (0.4% of operating revenue) as a result of a 9.5% decrease in operating revenue and a 21% increase in operating expenses. Additionally, the city continued with its infrastructure program, leading to a significant cash financing deficit of 24.6% of total revenue during 2020, which was financed through available liquidity. Because we expect Lima to continue to face challenges related to the coronavirus pandemic, leading to a slow recovery, it will likely register a financial deficit of 8.6% in 2021 and 2022, on average. This could further hurt liquidity because the municipality does not have plans to acquire additional debt....

Municipality of Lima (Peru): Update following rating downgrade to Baa2 from Baa1, outlook remains stable - Credit Opinion – 2021/09/08 – US$ 250.00 – ...The credit profile of the Municipality of Lima (Baa2 stable) 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 2020, Lima's operating margin deteriorated (0.4% of operating revenue) as a result of a 9.5% decrease in operating revenue and a 21% increase in operating expenses. Additionally, the city continued with its infrastructure program, leading to a significant cash financing deficit of 24.6% of total revenue during 2020, which was financed through available liquidity. Because we expect Lima to continue to face challenges related to the coronavirus pandemic, leading to a slow recovery, it will likely register a financial deficit of 8.6% in 2021 and 2022, on average. This could further hurt liquidity because the municipality does not have plans to acquire additional debt....