As dealers continued slashing through a thicket of yearend supply, trading remained light and attention focused on the coming host of offerings.

Yesterday's new-issue market was dominated by a short-term offering, as Michigan weighed in with $700 million of general obligation notes.

The securities, maturing in September 1992, carry MIG-1 and SP1-plust ratings. A First Boston Corp. syndicate originally priced them to yield 3.90%.

Demand was strong enough to drop the notes' yield 10 basis points, and the securities were offered to investors as 4 1/2s to yield 3.80% in 1992. A First Boston officer said the deal lured institutional buyers, including money market funds.

"There's basically a squeeze in the short-term market," one municipal note trader said adding that the Michigan deal could help ease the situation. "Some of your variables will back off a little bit," he said, predicting that paper with rates variable on a daily basis would be most affected.

In the negotiated long-term sector yesterday, a Smith Barney, Harris Upham & Co. syndicate tentatively priced $189.49 million of bonds for the Camden County, N.J., Pollution Control Financing Authority.

The first series, maturing in 2010, was priced at par to pay a 7.50% coupon. The securities are callable at 102 in 2001, declining to par in 2003, and subject to the alternative minimum tax. Series B has the same features except for its maturity date of 2009. Series C has four maturities, 1999 through 2002. The alternative minimum tax bonds were tentatively priced to yield from 6.80% to 7%.

The deal's series D accounted for $55.99 million of the loan. It is not subject to the alternative minimum tax and was tentatively structured with serials from 1993 to 2002, with a term bond in 2010 yielding 7.25%.

The securities are rated Baal by Moody's BBB-plus by Standard & Poor's, and A-minus by Fitch Investors Service.

Despite the pricings yesterday, the spotlight continued to be on deals that remain to be priced between now and the end of the year. The 30-day visible supply stood at $4.657 billion, little changed from Friday, when it reached $4.65 billion, but still high.

That tally included a $1.45 billion competitive slate and $3.2 billion of negotiated offerings. Standard & Poor's The Blue List of dealer inventory, meanwhile, fell $115 million to $1.57 billion.

"Unfortunately," one trader said, "The market's waiting for New Jersey and waiting to see what Massachusetts brings us, as well. The market's on hold."

New Jersey and Massachusetts are this week's two featured state general obligation deals. New Jersey expects to auction $425 million of tax-free GOs today, as well as a $25 million taxable portion.

Massachusetts could negotiate the sale of $350 million of GO debt as early as today, market sources said.

The state's bonds received a Standard & Poor's rating of BBB, the same as other recent assessments. Massachusetts officials had hoped a new spirit of austerity at large in the commonwealth would prompt an improvement in the rating outlook, but even that stayed where it had been -- at "stable." Last week, Moody's Investors Service also affirmed its Baa assessment.

Standard & Poor's while admitting "early signs of improvement" in the commonwealth's fiscal practices, also said yesterday that an upgrade in the state's rating or rating outlook will depend on the budget for the fiscal year 1993, which begins July 1, 1992.

Also queuing up for a second helping at the year-end all-you-can-eat debt buffet yesterday were New York City and the state's Local Government Assistance Corp.

A city official said yesterday that on Dec. 18 the city's syndicate will price $985 million of GOs.

New York will put its new credit enhancement capacity to work, selling $600 million of insured fixed-rate debt and $200 million of variable-rate debt backed by letters of credit. Another $185 million of the deal would be fixed-rate and uninsured.

The local government corporation plans to sell $450.1 million of debt today through Lehman Brothers. It will be the fourth deal in a $4.7 billion program to end the state's reliance on short-term financings every spring. Fitch Investors Service yesterday rated the securities A-plus.

Monday's Market

In the small amount of secondary activity that occurred yesterday, Denver airport bonds rose 1/2 point to 3/4 point on the announcement that Mayor Wellington Webb of Denver had scheduled a press conference to announce a final agreement with United Airlines. The carrier reportedly has agreed to sign a contract to use the $3.1 billion facility as a service hub. The Denver airport's 8s of 2025 were quoted at 97-98 1/4 to yield 8.15%.

In other secondary market activity, a Goldman, Sachs & Co. syndicate lifted restrictions on the serial $337.9 million offering from the New York State Environmental Facilities Corp. The term bonds had freed Friday, and sources at the firm said both had held firm in the market so far.

Also freed by a Goldman Sachs syndicate yesterday were $216.45 million of New York Dormitory Authority bonds issued for the state university system.

In the debt futures market, the March municipal contract was quoted up 9/32, at 95 21/32, from Friday.

Traders reported quiet secondary activity in the cash market, with a couple of bid-wanted lists, one totaling roughly $55 million. Some $5 million and $10 million bond pieces were also out for the bid.

In the secondary note market, MIG-1 rated Los Angeles Trans, traded yesterday at 3.65%-60%. New York State Trans rated MIG-2 traded at 4.95%-5.00%, a source said. A block of $7 million of New York City Rans sold to yield about 5.14% a source said.

Staff reporters John J. Doran and Sean Monsarat contributed to this column.

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