Municipals held up well yesterday despite splippage in the government market, and new issue pricing was particularly strong, traders said.

Sentiment was divided, however, on exactly how municipals finished.

"It's a touch easier but not nearly as much as the cash market on the government side," a municipal bond trader said yesterday. He judged municipals down 1/8 to 1/4 point overall. "The market is very thin and our fundamentals are still good."

A second trader concurred that municipals held up well relative to Treasuries. "There's no paper out there," he said. He also judged the market down 1/8 point.

A municipal analyst pegged the overall market as up 1/4 point. Dollar bonds ended unchanged to slightly better, he said, while yields on long high-grade issues fell three to five basis points. The remaining high-grade market ended slightly better, the analyst said.

The 30-year Treasury bond ended more than 1/4 point lower to yield 7.25%, driven down mainly by profit taking.

In debt futures, the September municipal contract ended down 11/32s to 93 1/4. Yesterday's September MOB spread was negative 376, compared to negative 379 on Monday.

Turning to the primary market, yesterday's offerings garnered strong demand, participants said.

"If you look at the new issue pricings, they were very, very strong, both negotiated and competitive," a municipal analyst said.

In negotiated action yesterday, a PaineWebber Inc. group repriced and restructured $300 million of Massachusetts special obligation revenue bonds.

The offering consisted of serial bonds priced to yield from 3.40% in 1995 to 5.90% in 1995.

At the repricing, yields on most issues were reduced by 10 basis points, but the most dramatic cut was seen in the 2014 maturity where the yield was lowered by 15 basis points. A 2013 maturity was also added.

Moody's Investors Service rates the Massachusetts offering A1, Standard & Poor's Corp. rates it AA-minus, and Fitch Investors Service rates it AA-plus. The bond are callable beginning June 1, 2004 at 101, declining to par in 2006.

"Massachusetts we had an interest in. But when they bumped it we faded." Richard J. Moynihan, president of Dreyfus Municipals Funds, which has roughly $27 billion of municipal debt under management.

Also yesterday, a Kidder Peabody & Co. group priced and re-priced $294 million Pennsylvania Convention Center Authority refunding revenue bonds.

The offering contained 1999, 2004, 2009, 2014 and 2019 maturities, with the 2019 maturity yielding 6.687%. Moody's rates the offering Ba, while Standard & Poor's and Fitch Investors Service rate it double-B.

"It went well," a source familiar with the offering said. At the repricing, yields on every maturity except 1999 were lowered, he said.

Elsewhere, the Salt Lake City Airport Authority priced $45.2 million in letter-of-credit, variable rate revenue bonds yesterday to yield 2.4% The bonds will be repriced on a floating basis every seven days. Kidder, Peabody & Co. was the bookrunning senior manager.

"It went very well. We were done by 11:30 a.m., New York time, as it should be in a variable rate deal," said Cheryl Cook, an official with the authority's financial adviser, Dain Bosworth Inc.

In competitive action yesterday, a Kidder, Peabody & Co. group won $132 million Denver City and County, Colo., general obligation water refunding bonds with a true interest cost of 5.0928%. Late in the day, a $66.95 million balance remained.

The bonds were reoffered to investors at a top yield of 5.55% in 2009. A 2010 maturity was not formally reoffered to investors. Moody's and Standard & Poor's rate the offering double-A.

The West Farms 7's

While Monday's $100 million Port Authority of New York and New Jersey deal may be the first 100-year municipal issue sold this century, the West Farms 7s make them look like decidedly short term.

According to Robert W. Chamberlin, senior vice president and supervisory municipal analyst at Dean Witter Reynolds Inc., the hamlet of West Farms, N.Y. issued bonds with a 275-year maturity back in the 1800s.

In the 1860s, the residents of West Farms and Morrisania knew that New York City was getting ready to annex them, Chamberlin wrote in a 1969 report regarding the bonds.

"With more than a touch of malice in their hearts, the town fathers of each community each sold 7% noncallable bonds to finance the construction of a common project, the construction of a new main street."

The interest cost was no obstacle because, as the hamlets had figured, the debt was taken over by New York City.

In an effort to shift as much of the debt burden to the city as possible, the Morrisanians sold bonds in 1873, which matured in 107 years.

"This in turn was made to look like the model of conservatives fiscal practice by the West Farms issues, sold between 1868 and 1873, which had final maturities in 2147 -- 275 years from the issue date," Chamberlin said in the report.

Yesterday, Standard & Poor's assigned an AA-minus rating to the Port Authority's consolidated bonds, which are the 93rd series.

The rating agency also affirmed its AA-minus rating on $4.2 billion of outstanding consolidated bonds, its A-minus/A-1-plus rating on 4185 million of versatile structure obligations, and its AAA rating on an additional $270 million of consolidated bonds insured by various insurers, a Standard & Poor's release says.

In other news, dealer inventories continued to decline on Tuesday as Standard & Poor's The Blue List fell $95 million yesterday, to $1.43 billion from 41.53 billion on Monday. That is the lowest level for the list since April 22 when it was $1.41 billion. The Blue List has now declined $300 million in four consecutive days.

The 30-day visible suppy of municipal bonds for today totals $4.030 billion, down $73 million from yesterday. That comprises $2.052 billion of competitive bonds, down $109 million from yesterday, and $1.978 billion of negotiated bonds, up 436.1 million from yesterday.

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