Christchurch City Council is confident its debt levels won't spiral out of control and lead to a further credit downgrade.
Standard and Poor's has downgraded the credit rating of Christchurch City Council and subsidiary Christchurch City Holdings.
The council's general manager of corporate services, Paul Anderson, says while there are no guarantees, the council has a better idea of the extent of the damage to the city's infrastructure and expects debt levels to stay within range.
The ratings agency has lowered the rating of both entities from AA to AA-.
A director at Standard and Poor's in Melbourne, Anna Hughes, says the city council is not as in control of its financial affairs as it could be, with the repair bill climbing as the full extent of damage to the city's infrastructure emerges.
She says there are also uncertainties due to the role of central government in the city rebuild, and the big cost associated with the proposed new sports stadium is an example of that.
"We still consider the financial strategy of the council to be very prudent, and the management of the council is still positive under our criteria.
"It's just that it's the council's political and managerial strength that's being weighed upon at the moment."
Ms Hughes told Radio New Zealand's Morning Report programme the downgrade means the city council may have to pay higher interest rates when it borrows money.