ATLANTA -- Atlanta has joined an emerging group of issuers specifying minority participation in competitive bond issues.

For its $88.1 million general obligation bond sale yesterday, the city required in advance of the offering that each bidding syndicate include a minority co-senior manager.

The sale follows a competitive deal sold last month by the New York State Dormitory Authority, in which the authority restricted lead managers of bidding syndicates to minority-owned firms.

Yesterday's Atlanta offering, which attracted four other accepted bids, was won by a group led by J.P. Morgan & Co., whose low bid carried a true interest cost of 6.1225 %. Minority-owned M.R. Beal & Co. served as co-senior manager for the syndicate.

Michael Bell, Atlanta's chief financial officer, said that although he expected seven bidders for the deal, the interest rate "was slightly below" the target level.

"Given the number of bids, we were very pleased," Bell said. The idea behind the participation goals, he said, was to help bring municipal bond underwriting practices in Atlanta "in line with the city's long-stated policy of raising the level of minority inclusion."

Under bidding guidelines sent beforehand to potential underwriters, Atlanta specified that "each syndicate group submitting a bid for the bonds must [include] one or more minority co-senior manager(s)."

"Additionally, it is the goal of the City of Atlanta that 20% of the bonds be made available to Minority/Female Business Enterprise firms for allocation and retention. The city requires that each syndicate group substantially comply with" this goal.

The J.P. Morgan group's bid topped the bid of a syndicate headed by PaineWebber Inc., which offered a TIC two and one half basis points higher than the winner's, at 6.1475%. PaineWebber's syndicate included an Annapolis-based minority-owned firm, Clark Melvin Securities Corp.

The PaineWebber offer was followed by a Merrill Lynch & Co.-led team that offered a TIC of 6.1619%; a Kidder Peabody & Co. syndicate at 6.1952%; and a Morgan Stanley & Co. group, which bid a TIC of 6.2078%.

Underwriters described J.P. Morgan's winning bid for the bonds as extremely aggressive.

"Atlanta got a fantastic interest rate," said Kishor M. Parekh, first vice president of trading and sales at Miami-based Howard Gary & Co., which was part of the Kidder sydicate.

Bell said the city would probably make the participation goals a standard part of its bidding procedure on competitive deals.

Peter Kessenich, managing director at Public Financial Management, said there had been indications that Grigsby Branford & Co. might head a sixth syndicate. He said, however, that the San Francisco-based minority-owned firm opted to join the group led by Merrill. Kessenich's firm was the co-financial adviser, along with Dobbs, Ram & Co., on the offering.

A potential seventh bidding syndicate headed by CS First Boston was prepared to enter the competition, Kessenich said, but its representative arrived minutes after the 11 a.m. deadline, and was barred from submitting a bid.

City officials said that the J.P. Morgan bid included 12% minority allocation. This compared with a commitment to allocate 20% to minority firms from the second-place PaineWebberled syndicate.

"The 12% met our with our substantial-compliance language," Bell said.

Under the bidding guidelines, minority/female business enterprise firms were defined as firms "at least 51% owned by one or more minority persons or women," and whose "management and daily business operations are controlled by one or more minority persons or women."

The Atlanta deal -- rated double-A by Moody's Investors Service, Standard & Poor's Corp., and Fitch Investors Service -- comprised two series, each with a differing maturity structure. A total of $80.1 million of Series A public improvement bonds come due between 1995 and 2023, while $8 million of Series B various purpose general obligation bonds mature between 1997 and 2014.

The Series A bonds were authorized by a $150 million general obligation bond referendum on July 19. Proceeds of the referendum are slated for infrastructure improvements in advance of the 1996 Summer Olympic Games in Atlanta.

The Series B debt was sold under a provision of Georgia's constitution permitting the city to sell up to $4 million of bonds each year for schools and $4 million for other purposes.

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