Christchurch Mayor Bob Parker says a downgrade of the city council's credit rating is realistic and understandable, given the position it is in.
Standard & Poor's has lowered the rating from a AA+ to AA on the council's debt, as well as that of holding company Christchurch City Holdings.
The international ratings agency cited the long-term effects on the council's revenues from disruption to the local economy from the quakes last September and in February this year.
It also cited a lack of insurance cover for the city's assets that were not damaged.
Mr Parker told Morning Report a AA rating is still a good one and is the same as that held by the four major trading banks.
The council's general manager for corporate services, Paul Anderson, says the downgrade will add one-tenth of a percentage point to the city's borrowing costs.
But he says borrowing costs for local authorities have fallen recently, ahead of the establishment next year of a New Zealand-wide local authority funding organisation.
Standard & Poor's associate director Claire Curtin says it has left the council on negative watch because of its lack of insurance for the majority of its undamaged assets.
But she says if the council was able to get reinsurance that the agency thought would protect the council's financial position, Standard & Poor's would be likely to restore the outlook to stable.
The council had held its previous AA+ rating from Standard & Poor's since 2001.
