MOSCOW. March 28 (Interfax) - Standard & Poor's Ratings Services affirmed its 'BBB' long-term issuer credit rating on Friday for Russia's capital city of Moscow and the national scale rating on the city at 'ruAAA' with negative outlook, the agency said in a press release.

Earlier this week, on March 25, S&P revised its forecast for the city to negative from stable after similar actions for sovereign ratings.

"The long-term rating on Moscow reflects, and is capped by, our 'BBB' foreign currency long-term rating on the Russian Federation (foreign currency BBB/Negative/A-2; local currency BBB+/Negative/A-2; Russia national scale ruAAA/--/--). It also incorporates the city's position as Russia's economic, administrative, and financial center, with above-average wealth in an international comparison. Low debt, 'very positive' liquidity, and only limited contingent liabilities also support the rating. Moderate budgetary flexibility and budgetary performance, which we expect to gradually deteriorate over the next few years, are neutral for the city's creditworthiness, in our view," S&P said.

"The rating is constrained by Russia's "developing and unbalanced" institutional framework, under which distribution of revenues and expenditures largely depends on central government decisions, and by our view of Moscow's 'negative' financial management, given the emerging nature of long-term planning and limited predictability of budget policy that we see," the press release says.

At the same time, in accordance with our criteria, we assess Moscow's 'indicative credit level' (ICL) at 'bbb+' under our criteria. The ICL is not a rating. It is a means of assessing an LRG's intrinsic creditworthiness under the assumption that there is no sovereign rating cap. The ICL results from the combination of our assessment of an LRG's individual credit profile and the effects we see of the institutional framework in which it operates. [