Privatized military housing credits — bonds that finance construction and renovation of on-base military housing — continue to demonstrate stable credit quality although possible federal budget cuts could weaken revenue, says Moody's Investors Service in a report.

"The overall credit quality of our rated portfolio has remained resilient during the course of the economic downturn due to the strong market position of the projects," said Moody's Analyst Carlos A. Calderon, author of the report. "The reliability of the basic allowance for housing -- the BAH -- as the primary revenue stream and management's ability to control operating expense growth have also been positive factors."

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