The agency Moody’s it brought its outlook on the rating of the Municipality of Lima from Baa2 to Baa3 from stable to negative, and for its credit profile, from Baa3 to Ba1.
Through a statement, they detail that their new perspective is explained by the sustained weakness in the liquidity profile of the Municipality of Lima, which places them “in a key credit challenge.”
“The stronger performance, balance and treasury financing surplus recorded in 2022 did not lead to improvements in treasury holdings raising the probability that liquidity will remain weak for longer,” they said.
Moody’s points out that the historical volatility of cash financing surpluses is coupled with uncertainty about the capacity of the management of Rafael Lopez Aliaga to improve their resource holdings over the next 2-3 years, “which increases liquidity risks.”
Besides, there is also the “limited transparency and disclosure of your financial information.”
Finally, the rating agency recalled that Lima is exposed to environmental, social and governance risks, and its infrastructure is exposed to shocks such as heat, droughts and floods, as well as El Niño, which in the long run can affect its fiscal performance. .
Source: Larepublica
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