California notes oversubscribed at 4.75%; size of deal increased.

A $1.65 billion offering of California notes was the only significant item in an otherwise somnambulant tax-exempt session yesterday.

The 1991 interim note issue was oversubscribed at a 4.75% yield at the preliminary pricing and its size increased to $1.65 billion from $1.5 billion. The notes will be dated and delivered today and will mature Aug. 15, 1991. They were marketed through an underwriting syndicate led by Lehman Brothers.

Because of the quick settlement, market participants said that there was not sufficient time to get all the necessary papers to the rating agencies and there was no formal note ratings on yesterday's offering. But the state's underlying triple-A credit rating was good enough to bring in the buyers, note traders said.

A Lehman Brothers official said that the deal attracted a good cross-section of buyers, including tax-exempt money market funds, bank trust departments, corporations, and sophisticated individual investors. There will be no notes available for trading today as they "all went away," the official said.

California's budget wasn't passed until last Tuesday, when Gov. Pete Wilson signed the $55.7 billion package after lawmakers approved a rise in income tax for the state's wealthiest taxpayers in exchange for worker's compensation reform. The proceeds from yesterday's note sale will be used to tide the state over until its regular note sale early next month.

Activity was extremely light in the second market yesterday with bond prices basically unchanged, but note traders said that the big California offering depressed their markets and yields rose about five basis points.

Outstanding New Yor State 5.40% March tax and revenue anticipation notes softened to a 5.53% bid, 5.45% market late in the day. Los Angeles County 5s were quoted at 5.15% bid, 5.10% offered. And New Jersey 5s were wide at a 5.20%, 5.10% market.

An offering of $150 million Maine notes, expected to be priced this week, has been temporarily delayed, according to a spokesman at Prudential Securities Inc. The issue is now expected to reach the market during the first week in August.

In a relatively small negotiated offering, a Dain Bosworth Inc. account began marketing $58.3 million Missouri Health and Educational Facilities Authority school district advance funding program notes. The notes were being offered at par to yield 5.10% to their Sept. 15, 1992 maturity.

They will be backed by a letter of credit from Industrial Bank of Japan Ltd. and are rated MIG-1 by Moody's.

In secondary dollar bond trading, the offering for New Jersey Turnpike Authority 7.20s of 2018 weakened slightly after $2 million came in for the bid and traded. The bonds were quoted in late trading at 103-103 1/8 to yield 6.66% to the 1999 par call and 6.89% to the premium call in 1993.

A two-sided market resumed for Florida State Board of Education 7 1/4s, due 2023 after four sessions without an offering. They were quoted near the close at 102 5/8-103 to yield % to the 2004 par call.

In other dollar bond action, Metropolitan Seattle 6 7/8s of 2031 closed at 96 3/8-5/8 to yield 7.13%; South Carolina Public Service Authority 7.10s of 2021 at 99 3/4-par to yield 7.10%; and Phoenix 6 1/2s of 2011 at 95 5/8-96, returning 6.87%.

Prerefunded bond prices were essentially unchanged in quiet trading. Issues prerefunded into 1995 were quoted in late trading at 5.85% bid, 5.80% offered. THose being called in 1996 were at 5.90% bid, 5.85% offered.

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