WASHINGTON - Most military housing bonds will be bolstered by the Defense Department's 6.9% average increase in the Basic Allowance for Housing rates for 2009, but some are still facing credit issues, such as those insured by companies whose ratings have been downgraded, Moody's Investors Service said in a report.

The report, issued late Friday, said the 22 military bases rated by Moody's experienced an average increase of 5.46%. The BAH rate, which fluctuates for each base on a year-to-year basis, is the housing allowance provided to U.S. service members to pay rent, utilities, and renter's insurance and is the primary source of revenue used to pay debt service on military housing bonds.

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