After deluge, munis are firm; market wants to digest deal feast.

Market players mopped up yesterday after three days of heavy issuance, leaving municipal prices little changed after a session of light trading.

Even the declines logged by Treasuries did not dampen the day.

Late Thursday, the 30-year U.S. Treasury was quoted down 1/2 point, to yield 7.54%.

While tax-exempt prices finished unblemished, dealers reported a weaker market tone and attributed some losses posted during the session to investors' lightening positions ahead of the Thanksgiving holiday next week.

"The Street took a breather after chopping through a lot of wood," a trader said. "People seem content to coast with their gains ahead of the holiday week. It's a mopping-up procedure."

Municipals ignored economic data, even though it reflected a suffering economy, good news for bond prices.

Initial state unemployment insurance claims rose 31,000, to a seasonally adjusted 386,000 in the week ended Nov. 7, the Labor Department reported.

U.S. housing starts in October fell 1.1 %, to a seasonally adjusted annual rate of 1.229 million units, the lowest level since July, the Commerce Department reported.

"We've had a nice run, and people are probably finding themselves with a few more bonds than they would like to own. So there's a certain element of caution," said Steve Malfitano, a partner with Cowen & Co.

Although such data would normally lift bonds, investors are now wary that any economic sluggishness could magnify the scope of President-elect Clinton's proposed fiscal stimulus package and prompt rising inflation, anathema to bonds, Malfitano said.

News issues

New issuance was fairly light Thursday, with only three sizable issues totaling about $640 million priced.

This compares with close to $5 billion of new debt priced by midweek, with more than $2 billion priced on Wednesday.

The Bond Buyer calculated 30-day visible supply at $5.86 billion, down $967.8 million from Wednesday. The Blue List of dealer inventory fell $54.3 million, to $1.06 billion.

A syndicate led by Lehman Brothers priced $178 million of Onondaga County Resource Recovery Agency project revenue bonds for the Resource Recovery Facility.

The offering, subject to the federal alternative minimum tax, included a 2000 term priced at par to yield 6.625%; a 2006 term priced at par to yield 6.875%; and a 2015 term priced at par to yield 7%.

The bonds are rated Baa by Moody's Investors Service and Aminus by Fitch Investors Service.

In other negotiated action, a Wheat, First Securities Inc. group repriced $271 million Fairfax County Water Authority, Va. water refunding revenue bonds, lowering some yields by 5 to 10 basis points.

After the repricing, yields on the bonds ranged from 3.40% in 1994 to 6.30% in 2029. The bonds are rated Aa by Moody's and AA-minus by Standard & Poor's.

In the competitive sector, $190 million Passaic Valley Sewerage Commissioners, N.J., sewer system revenue bonds were won by a group led by Donaldson, Lufkin & Jenrette Securities, with a net interest cost of 5.896%.

Serials were reoffered to investors at yields ranging from 2.80% in 1993 to 6.10% in 2010.

A 2013 term was priced as 5 3/4s to yield 6.13%; a 2015 term was priced as 5 3/4s to yield 6.15%; a 2018 term was priced as 5.80s to yield 6.18%; and a 2022 term was priced 6 7/8s to yield 6.20%.

An unsold balance of $56 million was reported late in the session.

The bonds are insured by the AMBAC Indemnity Corp. and triple-A rated by Moody's and Standard & Poor's.

In short-term competitive action, an offering of $100 million State of New York Mortgage Agency homeowner mortgage revenue bonds was won by two accounts.

Merrill Lynch & Co. won $68.24 million, non-AMT, bonds, which are priced to yield 2.75%. The remaining $31.76 million bonds, subject to the AMT tax, were won by Goldman, Sachs & Co. and priced to yield 2.70%. All of the bonds mature Dec. 1, 1993.

The bonds, backed by an investment agreement from Morgan Guaranty & Trust Co., are rated VMIG-1 by Moody's and A1 -Plus by Standard & Poor's.

Georgia Power Deal

Ahead next week, the Municipal Electric Authority of Georgia is considering pricing about $320 million of revenue refunding debt on Monday through a syndicate lead by The First Boston Corp., Edward P. Meyers, a vice president at the firm, said yesterday.

Meyers said the deal will be structured to include serial and term bonds, some of which will be insured. It could also include derivative products, including indexed cap bonds and detachable puts, he added.

Yesterday's Market

Secondary market trading was thin, market participants said. Traders reported one bid-wanted list from a bond fund made up of 19 items totaling about $60 million. The bulk of the items were California issues that traded, they said.

In secondary dollar bond trading, Piedmont Municipal Power Agency MBIA 6.30s of 2022 were quoted at 99 1/4 to yield 6.35%; California Public Works Board AMBAC 6.40s of 2016 were quoted at par; and California GO 6 1/4s of 2019 were quoted to yield 6.37%.

In follow-through business, Goldman Sachs reported an unsold balance of $53.1 million on $400 million California general obligation bonds sold Wednesday.

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