Taking advantage of lower interest rates, Massachusetts and Connecticut tapped the municipal market yesterday, offering more than $1 billion in securities, while secondary prices were unchanged in light trading.

A 27-member account led by senior manager First Boston Corp. reported the Massachusetts issue, which included $501 million general obligation refunding bonds, over-subscribed on "key maturities."

Late yesterday, a First Boston officer said that yields would be lowered as much as five basis points throughout the loan.

Before the repricing, the offering included $105 million of refunding bonds, series A current interest bonds, and capital appreciation bonds tentatively priced to yield from 6% in 1988 to 6.20% in 2000.

A 2011 term is tentatively priced to yield 7.10%, and a 2012 term is tentatively priced to yield 7.05%.

The capital appreciation bonds are tentatively priced to yield from 6.80% in 2001 to 7.20% in 2006.

The bonds are rated Baa by Moody's Investors Service, BBB by Standard & Poor's Corp., and A by Fitch Investors Service. The 1998-2000 maturities are insured by AMBAC Indemnity Corp. and rated AAA by Moody's and Standard & Poor's.

The issue included $171 million of series B refunding bonds, current interest bonds, and zeroes.

The refunding bonds are priced and structured as the series A bonds, while the zeroes are priced to yield from 6.40% in 2001 to 6.80% in 2006.

Also included in the issue are $103 million of series C refunding bonds and current interest bonds tentatively priced to yield 6% in 1996 and 6.20% in 1997.

A 2006 term yields 7%, a 2009 term yields 6.822%, and a 2012 term yields 7.15%.

The bonds are rated the same as the series A bonds, except for the 1998-2006 maturities, which are AMBAC insured and AAA rated by both Moody's and Standard & Poor's.

Finally, there are $122 million of consolidated loan series C current interest bonds tentatively priced to yield from 6.40% in 1998 to 6.60% in 2000.

A 2006 term is tentatively priced to yield 7%, a 2009 term is tentatively priced to yield 6.822%, and a 2012 term is tentatively priced to yield 7.15%.

The bonds are rated the same as the series A and B bonds, except for the 2009 maturity, which is AMBAC-insured and AAA rated by both Moody's and Standard & Poor's.

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