The ratings on Defence Housing Authority (DHA) reflect its tightly codified risk-sharing agreement with its main customer (Department of Defence) and its close relationship with its owner, the Commonwealth of Australia (AAA/Stable/A-1+). A proposed capital restructure will weaken DHA's very strong financial position, but still consistent with the ratings. About 98% of DHA's operating revenue comes from Defenceùa government department of the Commonwealth of Australiaùand so the credit quality of DHA's revenue stream is very strong. Furthermore, the signing of an agreement with Defence until at least 2010 codifies the sharing of risks. As a result, DHA bears a degree of market rental risk or capital value risk for about only 25% of its managed stock. For the remaining stock,
