Treasuries bopped, munis end mixed; new-issue market is running light.

Municipals were mixed in the face of Treasury losses yesterday, while new-issue action was dominated by the New York State Urban Development Corp.

Government prices declined as much as 1/4 of a point before settling down only marginally near the end of New York trading as worries about a Fed tightening pestered bonds for the second day. Municipals were spared the volatility, although the confidence level took a hit, traders said. Sellers anted up some sizable bid-wanted lists, but they had little effect on the market overall. After what was termed a mostly lack-luster session, prices were quoted mixed on the day.

In secondary dollar bond trading, New York State Thruway 5s of 2020 were quoted at 5.32% bid. 5.28% offered; Dade County, Fla., 5s of 2013 were quoted at 5.35% bid. 5.32% offered: and Orange and Orlando FGIC 5 1/8s of 2020 were quoted at 5.42% bid, 5.40% offered.

Chicago O'Hare MBIA 5s of 2018 were quoted at 5.45% bid, 5.42% offered: Florida Board of Education 5.20s of 2023 were quoted at 96 1/2-7/8 to yield 5.43%.

In the debt futures market, the March municipal contract settled down 2/32 to 102.18. The contract settled off a high of 102.21 and up from a low of 102.13. The MOB spread was unchanged at negative 381.

Reflecting the mixed market sentiment, The Blue List of dealer inventory continued its recent rise, jumping $55.1 million, to $2 billion. The last time The Blue List broke the $2 billion barrier was Nov. 3, when it hit $2.07 billion. The high for 1993 was $2.21 billion tabulated on Sept. 30.

New-issue action was light yesterday, except for Goldman, Sachs & Co.'s pricing of $724 million of New York State Urban Development Corp. correctional facilities revenue refunding bonds.

The firm restructured the deal late in the day, boosting the amount from $668 million.

The final offering included $278 million of correctional facilities revenue bonds priced to yield from 4.50% in 1998 to 5.65% in 2010. A 2014 term, containing $63 million of the loan, was priced with a coupon of 5.50% to yield 5.70%; a 2016 term, containing $39 million, was priced as 5 1/2s to yield 5.80%; and a 2017 term, containing $45 million, was priced as 5s to yield 5.375%. The serials and the 2013 term are noncallable.

There also was $392 million of correction capital facilities revenue bonds priced to yield from 5.20% in 2002 to 5.35% in 2011. A 2014 term was priced as 5 1/4s to yield 5.40%; a 2016 term was priced as 5 1/2s to yield 5.80%; and a 2021 term, containing $162 million, was priced as 5 1/4s yield 5.80%. The serials and the 2013 term are noncallable.

The uninsured bonds are rated Baal by Moody's Investors Service, BBB by Standard & Poor's Corp., and A by Fitch Investors Service. The corrrectional facilities bonds from 2007 through 2009 and in 2017 are insured by the AMBAC Indemnity Corp., while correctional capital facilities bonds in 2010, 2011, and 2014 are backed by Financial Security Assurance Inc.; both groups are rated triple-A by the three ratings agencies.

In the competitive sector, Smith Barney Shearson Inc. won $80 million of New York State full faith and credit general obligation bonds with a true interest cost of 4.8579%.

Morgan Stanley & Co. had the cover bid with a true interest cost of 4.8706%.

Smith Barney reported an unsold balance of $11.87 million late in the day.

Serial bonds were reoffered to investors at yields ranging from 2.50% in 1994 to 5.25% in 2013.

The managers said the issue is rated A-minus by Moody's and Standard & Poor's.

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