Melbourne, Sept. 6, 2010Standard & Poor's Ratings Services said today that it has placed its 'AA+' issuer credit rating on Christchurch City Council and the council subsidiary Christchurch City Holdings Ltd. on CreditWatch with negative implications pending further analysis of the financial and operational consequences of the Sept. 4, 2010, earthquake in Christchurch.

We are monitoring developments in Christchurch to gauge the situation faced by the council as well as its holdings company in dealing with the effects of the earthquake on their assets and operations. We have previously noted that Christchurch City's debt levels are high for the current rating and approaching levels that could lead us to reassess the rating.

We expect to resolve the CreditWatch during the next 90 days as more-accurate information becomes available regarding the extent of damage and state of repairs, insurance coverage, and the impact of the quake on these entities' risk profiles, among other factors. For example, there has been widespread damage to infrastructure assets, although we expect much of this is likely to be insured. There may also be secondary effects on the council, as the council not only replaces infrastructure but also participates in the rebuilding of the local community's assets. Based on any such information and its implications on the credit quality of Christchurch City and/or the holding company, we may take further rating actions as the situations warrants. Any rating action would not likely exceed one notch downward.