The City of Winnipeg's credit rating has been downgraded, but it remains stable, according to Moody's Investors Service.

The international agency announced on Tuesday that the city's senior unsecured rating has been changed from AA-1 to AA-2, but its rating outlook is stable.

The downgrade came after Moody's dropped the Manitoba government's long-term credit rating — also from AA-1 to AA-2 — last week, citing a fast-growing debt load and a failure to meet balanced-budget targets.

It was the first Moody's downgrade for Manitoba in more than two decades.

Moody's says the city's debt burden has increased over the past two years to about 67 per cent of its operating revenues in 2014 and is expected to increase to 80 per cent of operating revenue in the next five years as the city undergoes major capital projects.