Merrill Lynch & Co. continued to outpace the 1992 underwriting champion -- Goldman, Sachs & Co. -- and retained its standing as the top-ranked underwriter of long-term municipal debt during the first half of 1993, according to Securities Data Co.

As the premier securities underwriter, Merrill was lead manager of 211 issues totaling $18.51 billion and earning a 12.9% market share.

Despite a 6% increase in volume, Goldman, ranked second, could not regain the first-place slot it relinquished in the first quarter. Previously, Goldman had been the top senior manager since the end of 1990.

Goldman served as senior manager of $16.33 billion of debt, garnering an 11.4% market share.

Rounding out the top three is Lehman Brothers, which captured an 8.2% market share as manager of 236 issues totaling $11.77 billion.

Long-term municipal new-issue volume totaled approximately $144.8 billion during the first half of 1993, a 27.2% increase over last year, and the largest first-half volume ever, Securities Data said.

In addition, a record $95.2 billion of refunding or combined refunding and new-money issues outpaced purely new-money issuance by a margin of two to one. This continued the trend of high refunding volume prompted by historically low interest rates that has characterized 1993.

Merrill Lynch also gained top honors when full credit is given to each manager. The firm was comanager of $53.7 billion of debt during the first half.

"Obviously we are delighted to be number one," said Edward Sheridan, manager of municipal markets for Merrill Lynch. "But a half year does not a full year make and we will have to continue to work at bringing in customers."

Sheridan also said that as refundings start to dry up, it will be increasingly important for Merrill Lynch to find new and improved ways to serve its customers.

The largest issue of the quarter was the sale of $1.61 billion of North Carolina Eastern Municipal Power Agency revenue and refunding revenue bonds, negotiated by Smith Barney, Harris Upham & Co.

Merrill's top deal of the first half of 1993 was a $1.01 billion New York State Dormitory Authority refunding sale. It was the third biggest bond issue of the period.

Richard E. Kolman, vice president and manager of the underwriting desk at Goldman Sachs, said yesterday that the rash of refundings and advance refundings has given a firm underpinning to the market.

"If the interest rates continue to move lower. then the rest of the year should be as busy," Kolman said. "We benefited from those rates during the first part of 1993."

Goldman Sachs' biggest deal of the year was the sale of $796 million of Washington Public Power Supply System bonds during May, the sixth largest deal of the year.

Third-ranked Lehman Brothers' largest sale during 1993 was a $958 million offering of Commonwealth of Puerto Rico refunding and advance refunding bonds.

The deal was scheduled to be much smaller, but market conditions and low interest rates allowed Puerto Rico to advance refund a larger amount of bonds.

Short-term volume totaled $21.9 billion during the first six months.

Lehman Brothers was the leading senior manager of notes with $6.5 billion priced. When full credit was given to each manager, Goldman Sachs was first with $8.22 billion and Lehman Brothers was second with $8.08 billion of notes sold.

The short-term sector also saw several large deals during the period.

The largest note issue was $3 billion of California revenue anticipation notes. Lehman was the senior manager for the deal.

President Clinton's proposed tax increases have also affected the volume of issues that have been sold this year.

"People are looking for that safe haven for money," said a New York-based trader. "As the budget plan rolls through Congress. there will be even more interest in munts."

Kolman of Goldman Sachs agreed that tax increases could help the municipal market, and added that if interest rates fall there will be more advance refundings.

"The escrow restrictions will become less and less a problem if interest rates decline," Kolman said. "Instead of only present refundings, a lot of the negative arbitrage will allow for bonds sold in the late 1980s to be advance refunded."

Securities Data's long-term bond rankings are based on long-term issues maturing in 13 months or longer. Note rankings are based on issues maturing in 12 months or less. As compiled by The Bond Buyer, rankings do not include private placements. remarketings, and taxable debt issued by private nonprofit organizations.

Securities Data's figures are preliminary and subject to revision.

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