The rating on Seoul Metropolitan Government (SMG) reflects our view that the city will continue producing healthy operating surpluses and maintain robust liquidity balances. This is based on our updated base-case scenario for SMG and our extension of the forecasting horizon through 2019. We also expect debt to continue to decline steadily as balances after capital accounts remain in surplus. SMG's financial management, economy, and negligible contingent liabilities complement our assessment of the government's credit profile. Korea's evolving but balanced institutional framework partially offsets these strengths. SMG has a strong and stable financial management team. The team has ensured that the city has forward-looking and prudent financial management, and has contributed to the city's strong financial position. The relationship between
