Christchurch City Council and the holding company for its investments had their credit ratings cut one notch to AA with a negative outlook by Standard & Poor's, which said damage from the earthquakes had weakened the local economy.
The short-term ratings were affirmed at A-1+.
The earthquakes "have reduced the council's budgetary flexibility and will likely have a negative effect on the local economy in the medium- to long-term," Standard & Poor's credit analyst Claire Curtin said.
Adding further weakness to the city's credit profile was its lack of insurance on most of its undamaged assets. The council's insurance cover expired on June 30 "and while the council is optimistic of securing insurance coverage, the timing and scope of future cover is uncertain," she said.
Lack of cover has significantly increased Christchurch City's contingent liabilities."
