The tax-exempt market outperformed Treasuries yesterday, despite a flood of more than $3 billion of supply, including $565 million of Virginia Housing Development Authority put bonds.

Prices in the credit markets remained in the same range set last Friday as market players wait for tomorrow's retail sales data for near term direction. But yesterday, Treasury prices fell 3/8 suffering from illiquidity, while municipals were unchanged to slightly firmer.

In the debt futures market, the September municipal futures closed down 8/32 to 94.16, but still fared better than governments. The MOB spread narrowed as a result, moving to negative 153 from negative 159 Monday.

Secondary municipal trading was light, but the market firmed after underwriters were able to lower yields on negotiated offerings and aggressively price the larger competitive deals.

For example, in high-grade competitive new issue action, $104 million Commonwealth of Virginia full faith and credit bonds were reoffered to investors at yields five to 10 basis points lower than deales expected late last week.

The deal, structured as $44 million higher education institutions bonds and $50 million section 9 refunding bonds, was won by a First Boston group with a true interest cost of 5.778%.

The firm reported an unsold balance of $24 million late in the session.

The bonds were reoffered to investors at yields ranging from 2.90% in 1993 to 6.15% in 2010. A 2012 term was priced as 6s to yield 6.20%, a 2015 term was priced as 6s to yield 6.25%, and a 2022 term was priced as 6s to yield 6.30%.

The issue is rated Aaa by Moody's. Lehman Brothers had the cover bid with a TIC of 5.78025%.

Negotiated Sector

Dominating this calendar, Dean Witter Reynolds Inc. priced and repriced $487 million of special obligation bonds for the Triborough Bridge and Tunnel Authority to lower yield four to six basis points throughtout the loan.

The final reoffering scale including serial bonds priced to yield from 2.85% in 1993 to 6.30% in 2008. A 2012 term, containing $103 million of the loan, was priced as 6 1/4s to yield 6.38%; a 2015 term, containing $95 million of the loan, was priced as 6s to yield 6.38%; and a 2017 term was priced as 5 1/2s to yield 6.38%.

The serial bonds are insured by the Financial Guaranty Insurance Co. and triple-A rated by Moody's Invstors Service, Standard & Poor's Corp., and Fitch Investors Service. The term bonds are insured by the AMBAC Indemnity Corp. and triple-A rated by Moody's and Standard & Poor's.

In other action, Piper, Jaffray Inc. tentatively priced $395 million Iowa School Corporations warrant certificates.

The offering included $1 million noncallable securities priced as 3 1/2s at par, due July 23, 1993, $264 million warrants priced as 4 1/8s at par, due December 30, 1993, and $130 million warrants, due February 1, 1994 which were not formally reoffered to investors.

The managers said they expected the issue to be rated SP-1 plus.

The First Boston Corp. priced and repriced $286 million Georgia Municipal Electric Authority Project One special obligation bonds.

The 2013 term bond yield was lowered by about four basis points and the 2017 term bond yield was lowered by about three basis points.

The final pricing included serial bonds priced to yield from 5.70% in 1999 to 6.45% in 2010. A 2013 term was priced as 6.40s to yield 6.45% and a 2017 term, containing $125 million of the loan, was priced as 6.572%.

The bonds are rated A1 by Moody's and AA-minus by Standard & Poor's, except for the 2013 term body, which is AMBAC-insured and triple-A rated by both ratings agencies.

Clark County Priced

Making a return to the primary sector was $250 million of Clark County, Nev., general obligation, limited tax, transportation improvement bonds, which were priced and then repriced by Smith Barney, Harris Upham & Co.,

The deal had been yanked from the market last week, after a preliminary pricing, due to market conditions.

After pricing yesterday, term bond yields were lowered by about two basis points on the issue.

About $137 million Series A bonds were priced to yield from 5.15% in 1996 to 6.50% in 2010. A 2012 term was priced as 6.55s at par; a 2016 term was priced at an original issue discount as 6s to yield 6.53%; and a 2017 term was priced as 6 1/2 to yield 6.52%.

There also were $104 million Series B bonds priced to yield from 5.15% in 1996 to 6.50% in 2010. A 2012 term was priced as 6.55s at par, a 2016 term was priced at an original issue discount as 6s to yield 6.53%, and a 2017 term was priced as 6 1/2s to yield 6.52%.

Finally, $9 million Series C bonds were priced to yield from 4.90% in 1995 to 6.50% in 2010. A 2016 term was priced as 6s to yield 6.53% and a 2017 term was price as 6 1/2s to yield 6.52%.

The issue is AMBAC insured and triple-rated by Moody's and Standard & Poor's.

Moving to the northeast, a 26-member syndicate, led by Merrill Lynch & Co., priced and repriced $259 million Commonwealth of Massachusetts general obligation bonds.

Serial bond yields were lowered by five to 10 basis points and a Series A 2008 maturity was added, boosting the amount of the issue from the original $250 million.

The final reoffering included $208 million consolidated loan Series A bonds priced to yield from 4.90% in 1996 to 6.35% in 2004. A 2008 term was priced as 6 1/2s to yield 6.60% and 2013 term bond was priced as 6s to yield 6.63%. There also was $51 million consolidated loan Series B bonds priced as 6 1/4 to yield 6.45% in 2005 and a 2013 term was priced as 6 1/2s to yield 6.67%.

The issue is rated Baa by Moody's, BBB by Standard & Poor's, and A by Fitch.

Merrill also lowered yields by five basis points throughout $100 million Massachusetts special obligation revenue highway improvement loan bonds.

The final pricing included serial bonds offered to investors at yields ranging from 5.35% in 1998 to 6.35% in 2007. A 2013 term, containing $51 million of the loan, was priced as 6s to yield 6.45%.

The issue is rated A by Moody's, Standard & Poor's, and Fitch.

The two issues are the first of the state's special obligation bonds to be backed by a gas tax to finance transportation projects.

Lehman Brothers priced and repriced $97 million Pennsylvania Housing Finance Agency convertible option single family revenue bonds to lower the reoffering yield by 10 basis points.

The final offering, subject to the federal alternative minimum tax, was priced as 3.50s at par, due June 1, 1993. The issue is rated Aa/VMIG-1 by Moody's and AA/A-1-plus by Standard & Poor's.

Secondary Market

Traders reported relatively light action as most market players focused on the primary sector.

In secondary dollar bond trading, prices were quoted up 1/8 to 1/4 point higher in spots.

Greater Orlando Aviation Authority AMT insured 6 7/8s of 2021 were quoted at 97 3/8 5/8 to yield 6.57%, New York State Power Authority 6 1/4 of 2023 were quoted at 97 5/8-7/8 to yield 6.42%, and South Carolina PSA 6 5/8s of 2031 were quoted at 98 7/8-99 1/4 to yield 6.70. California GO 6 1/4 of 2012 were quoted at 97 1/2-5/8 to yield 6.47% and Oklahoma Turnpike Authority MBIA 6 1/4 of 2022 were quoted at 97 3/4-98 to yield 6.41%.

Traders in short-term securities reported a busy day in the primary sector but quiet in the secondary.

The largest short-term deal of the day was First Boston's pricing of $565 million Virginia Housing Development Authority put bonds as sole manager.

The loan was divided up into five sections.

The first two sections are subject to the alternate minimum tax. The first part of the loan, $100 million Series B Short Term Extended Maturity-1 AMTs were originally priced to yield 3.25%. The reoffering yield was lowered to 3.10% at the repricing. The notes are due Dec., 17, 1992.

The second portion of the loan consisted of $125.1 million Series B STEMs 2-AMT's and were originally priced as 3.55% but were repriced to yield 3.45%.

The third portion consisted of

The third portion consisted of $80 million Series C STEMs-1 with a put date of Sep. 10, 1992, and were originally priced to yield 2.90%. At the repricing, the yield was lowered to 2.80%.

Section four, $100 million of Series C STEMs-2, was originally priced to yield 3.15% but was repriced to yield 3.05%. Those notes are due March 11, 1993.

The fifth and final section is comprised of $160 million Series C STEMs-3, which were originally priced to yield 3.30%, but were later repriced to yield 3.20%.

Moody's rated the shortest-term notes VMGI and the longer-term notes A1-plus. Standard & Poor's affixed an A1-plus rating on the shortest-term notes and A-plus on the longer-term securities.

In other action, Nassau County, N.Y., sold $210 million in re venue anticipation notes yesterday and county finance officials were surprised by the pricing levels because they have expected to play much higher rates, hovering above at least 4%, to issue the short-term securities.

County Treasurer John V. Scaduto said said Nassau sold the notes at an average yield of about 3.40%.

The securities were placed with about 10 different investment on the issue, Mr. Scaduto said. The notes were sold in anticipation of county sale tax revenues. Yields ranged from 3.19% for securities maturing in April, 1993.

The county's general obligations bonds are rated A by Moody's Investors Service.

Meanwhile, in secondary action, California Rans 3 1/4 were quoted at 3.45 bid. 3.40% offered; Los Angeles Trans 5 1/4s were quoted at 3.45% bid, 3.40% offered, Los Angeles

ns 5 1/4 were quoted at 3.45% bid, 3.40% offered; Los Angeles Tans 5s were quoted at 3.47% bid, 3.42% offered; and New York State Trans 3.65s were quoted at 3.00% bid, 2.97% offered. Patrick M. Fitzgibbons and Charles Gasparino contributed to this column.

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