March 14 - --Standard & Poor's Ratings Services today said that the Federal Reserve's objection to Citigroup Inc.'s (A-/Negative/A-2) 2012 capital distribution plan does not affect the ratings on Citi. On March 13, the Fed released the results of its 2012 comprehensive capital analysis and review. Citi's Tier 1 common ratio declined to 4.9% under the stress test, including Citi's request for capital distributions, from 11.7%. The Fed's target was 5%. Excluding Citi's requested capital distributions, its Tier 1 common ratio under the stress test declined to 5.9%. In our view, management was aggressive in its capital request given the still unstable operating environment. We view this negatively in terms of the firm's overall risk tolerance. We continue to believe that Citi's capital and earnings are "adequate" (neutral to the ratings), as our criteria define it, and we project that Citi's risk-adjusted capital ratio, which was 6.7% as of September 2011, likely will rise to more than 7.0% by 2013. Our forecast assumes modest dividends and share buybacks. We currently assess Citi's risk position as "moderate" (negative to the ratings), which largely reflects the considerable amount of risky assets in its Citi Holdings portfolio.