A $200 million Florida State Board of Education full faith and credit issue drew a 6.888% maximum yield yesterday and prices closed 1/4 point higher in the secondary market.

The Florida issue, rated double-A by Moody's Investors Service and Standard & Poor's Corp., was awarded in close bidding to an account headed by Merrill Lynch & Co. at a true interest cost of 6.833%. A Goldman, Sachs & Co. group was right behind with a 6.844% TIC.

The offering was comprised of $103.1 million term bonds of 2021 priced at 98 1/4 as 6 3/4s to yield 6.88% and serial bonds yielding from 4.70% in 1991 to 6.25% in 2001, 6.70% in 2006 and 6.83% in 2012.

Late yesterday there was a serial balance of $23.2 million.

An officer at Merrill Lynch reported "good institutional, bank trust department, and retail business for the serials, and institutional and Street interest for the terms."

The term bonds were released from syndicate price restrictions yesterday afternoon and were locked in the free market at 97 7/8 to yield 6.92%. The pricing of the term bonds was right in line with where Florida State Board of Education bonds were trading in yesterday's secondary market. A seasoned 7 1/4% term bonds, due 2023, was quoted late yesterday at 102 1/2-3/4 to yield 6.92% to the par call in 2004.

In the short-term market, a Goldman, Sachs & Co. account marketed $200 million Connecticut general obligation temporary notes, due Sept. 30, 1992, at 100.042 as 5s to yield 4.75%. The issue will be delivered this Monday.

The Connecticut notes are not rated. The Governor and State Legislature have yet to reach agreement on a budget for the 1991-92 fiscal year.

A Goldman, Sachs representative said that "they were happy to get the deal done at the same level as Monday's $1.65 billion California note issue."

Although there was no big move in the secondary market, traders reported a much firmer tone yesterday. Prices in both the dollar bond and GO serial bond markets were up 1/4 point, note yields dropped as much as 15 basis points, and yields on prerefunded bonds slipped about three basis points.

In explaining the firmer tone, traders cited a big gain in the government bond market following a very successful five-year auction, weak car sales for mid-July, and a 2.75-point drop in the Commodity Research Bureau Index to 209.18.

There was also good follow-through for Tuesday's major new issues. The $200 million in Minnesota GO issue was down to tag ends, with only $8 million left in the 1995 maturity. Market participants reported that most of Tuesday's $56 million unsold balance was placed with permanent investors at the original list prices and a slightly higher concession.

The unsold balance in the $57.4 million San Diego Unified School District, Calif., issue was slashed to $4.9 million with bonds left only in the 1997 and 2000 maturities.

In dollar bond trading, New Jersey Turnpike Authority 7.20s, due 2018, were quoted late in the session at 103-103 1/4 to yield 6.64% to the 1999 par call and 6.80% to the premium call in 1993. New York LGAC 7 1/4s of 2023 closed at 97-97 1/4 to yield 7.24%. And Metropolitan Seattle 6 7/8s of 2031 were at 96 3/4-97, where they returned 7.10%.

Note traders cited good business for corporations and institutions for the solid price gains in the short-term market. Los Angeles County and New Jersey notes moved up smartly with both quoted at 5.05% bid, 5% offered near the close of trading. New York tax and revenue anticipation notes were at 5.47% bid, 5.45% offered.

In prerefunded bond trading, the market for issues with a 1995 call was quoted near the close of trading at 5.82% bid, 5.80% offered.

Negotiated Pricings

Texas, 72.8 million college student loan senior lien revenue bonds, series 1991. The interest on the issue is subject to the federal alternative minimum tax for individuals.

Ratings: Moody's A.

The $46.7 million current interest bonds are being offered at par to yield from 6.40% in 1995 to 7.30% in 2003, 7.50% in 2006, and 7.75% in 2025.

Yields on the compound interest bonds are expected to run from 6.60% in 1995 to 7.75% in 2006.

The convertible compound interest bonds, due 2025, are expected to yield 7.875%. They will convert to interet bearing bonds on Oct. 1, 2001.

The bonds are being marketed through an account headed by Merrill Lynch & Co. The official award is expected Monday.

Ouachita Parish Hospital Service District No. 1, La., $34.9 million hospital revenue bonds (Glenwood Regional Medical Center) series 1991.

Ratings: Standard & Poor's A-minus.

The $26.8 million term bonds, due 2021, were offered at 97 3/4 as 7 1/2s to yield 7.692%. The $4 million term bonds of 2006 were priced at 99.105 as 7 1/2s to yield 7.60%. And the serials were scaled from 6.25% in 1994 to 7.35% in 2001.

First Boston Corp. was underwriting manager. The verbal award was received yesterday.

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