DENVER - A handful of retail investors nervously sold Denver International Airport bonds at rock-bottom prices Friday, but traders reported no wholesale dumping.

The trading activity signaled that the market had begun to factor in the probability that the opening of Denver International will be delayed a fifth time, analysts and traders said. There is about $3.2 billion of outstanding airport revenue bond debt and another $300 million of Denver airport system revenue debt.

Extensive tests on the problem-plagued automated baggage system faltered last week, leading the builder of the system to declare that the May 15 scheduled opening was "in serious doubt."

Sales of small blocks of Denver airport bonds Thursday and Friday drove prices as low as 89 to yield 7.70% on the alternative minimum tax 6 3/4% bonds maturing in 2022, trading sources said. The same bonds yielded 6.95% a little more than a month ago.

Despite a day of jitters, however, there were no large blocks of Denver Airport revenue bonds sold, traders said.

New York sources reported a Thursday afternoon trade of 7 1/4 bonds maturing in 2023 at a 7.65% yield. A Friday morning trade of $1 million of 6 3/4% 2022 bonds was done at a yield of 7.60%. And a Friday afternoon trade of $2.5 million of 6.5% coupon bonds maturing in 2006 was done at a yield of 7.5%.

On midday Friday, Denver traders reported a bid wanted of $10 million to $12 million of AMT 7 3/4% bonds maturing 2013 to yield 7.65% at a price of 100 3/4. Other bids on the 6 3/4% bonds maturing in 2022 were for 7.6% yields.

"This has hit people worse than the other delay [on March 9 to May 15]," said Sam Doyle, head of municipal trading at the Denver office of Kirkpatrick, Pettis, Smith, Polian Inc. "There doesn't seem to be light at the end of the tunnel."

Doyle predicted that yields on the 6 3/4% coupon bonds would soon be yielding 8%.

Traders and analysts across the country reported concern over possible actions by the rating agencies.

"The market doesn't know what's going on," said analysts at a major New York retail dealer. "That's the problem right now. We have people holding positions who are worried about a downgrade."

Standard & Poor's Corp., which has Denver International debt rated BBB and on CreditWatch with negative implications, has said it would probably downgrade the bonds if the airport does not open May 15.

Moody's Investors Service, which rates the bonds conditional Baa1, has said it would review its rating if the airport does not open May 15.

Peter Bianchini, director with Standard & Poor's in San Francisco, said it is unlikely that the rating agency would downgrade more than a notch to junk bond, or non-investment grade, status, a move that could force institutional holders to try to sell their debt.

"We're waiting to hear what their delay plan is," Bianchini said.

Standard & Poor's credit committee will meet this week, probably tomorrow on Denver airport bonds, rating agency officials said.

"We have them on CreditWatch already," said Todd Whitestone, the lead Standard & Poor's analyst on the project. "Until they do something with the opening date, we're not going to have any further action. We feel we've already alerted the market there is a potential problem."

Whitestone said Standard & Poor's action would be immediate upon a formal announcement by Denver of another airport delay. Denver officials put off an announcement until early this week pending further testing of the baggage system over the weekend.

On Friday, the city released a statement quoting Gene Di Fonso, president of BAE Automated Systems Inc., which designed and built the baggage system. "Without declaring defeat we need to be intellectually honest about what we saw in today's testing; the May 15 opening is in serious doubt," Di Fonso said.

Mayor Wellington Webb replied, "While I am extremely disappointed that BAE now doubts its ability to meet the current May 15 deadline, I believe it is important to continue the high-volume integrated testing at DIA."

Thursday's test, the first large-scale movement of bags on the systems on Continental Airlines' Concourse A and United Airlines' Concourse B, was fraught with difficulties.

The United test exposed software glitches and jammed baggage carts. Tests were halted by 5 p.m., local time, on United. City officials complained that United did not tag its bag correctly, causing the computer system to mismanage the sending of empty cars to the terminal building.

Although Continental's test went more smoothly, it took 90 minutes to send 584 bags out to Continental's concourse. Of those, 560 arrived, but only after 159 were misread by the computer scanners and had to be rerouted manually.

In order to regroup, BAE reverted to limited testing on Friday. Denver officials said the tests on both United and Continental concourses went smoothly, but only involved limited numbers of bags.

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