Municipals ended a lackluster day unchanged, while a Prudential Securities Inc. group captured California's $400 million general obligation offering.

"It's kind of a strange day," one trader said. "We out-performed governments a little bit."

Helping municipals was the fear of insufficient supply, he said, adding that bond funds are starting to see inflows again and strong demand from retail continues to develop.

The market remains fairly nervous, however, the trader said. "It seems to have a downside bias," he said.

In debt futures, the June municipal contract closed nearly 1/4 point lower at 90 25/32s. Yesterday's June MOB spread was negative 430, down from negative 431 Monday.

The Prudential group won California's $400 million of various purpose full faith and credit general obligation bonds with a true interest cost of 5.9449%. Bank of America had the cover bit with a TIC of 5.95391.

"We are pleased, of course. The market has been volatile, as you know," said Hal Geiogue, California's assistant state treasurer. "We were right on the market, and got a good bid under 6%."

"It's going pretty well," another source familiar with the offering said, adding that he expected an unsold balance of $110 million to $115 million.

"We had a good blend of bond funds, [property and casualty] buyers, retail and trust business, a good mix," he said. The 10- to 15-year range proved the most popular overall, the source said, but also noted that trust fund and retail buyers showed good interest in the insured shorter maturities and bond funds were interested in the long end.

The offering contained serial bonds priced to yield from 4.40% in 1996 to 6.25% in 2015. A 2018 term, containing $27 million, was priced as 6s to yield 6.30%.

A 2020 term, containing $18 million, was priced to yield 6.274%. A 2024 term, containing $37 million, was priced as 6s to yield 6.35%. AMBAC insured the 1998, 2000, and 2001 maturities, while FGIC insured the 2020 maturity.

The uninsured portions are rated double-A by Moody's Investors Service and Fitch Investors Service, and A-plus by Standard & Poor's Corp. The bonds are callable beginning May 1, 2004 at 102, declining to par in 2006.

Not among buyers was Bernie Schroer, a vice president and senior portfolio manager of the Franklin Group of Funds' California Tax-Free Income Fund. The fund totals just under $14 billion.

Schroer said he passed on the offering because the price was too high, by roughly five basis points. Had he b en a buyer, Schroer said he would have been interested in the offering's insured portion.

As for the state's creditworthiness, he said, "I guess everybody's waiting to see how the budget comes out."

The state constitution says that California is supposed to have a budget by June 15, but July 1 is the more likely date, Geiogue said. California's next scheduled issue date is in September, he said.

Also in connection with yesterday's California deal, word spread that Bank of America had reduced the members of its national syndicate.

"The syndicate is smaller," Susan Clevenger, a Bank of America spokeswoman said, adding that the firm had notified the members it had dropped.

"The membership was way too large and we couldn't do justice to all members," Clevenger said. "Now we can better serve the members."

New Issues

In negotiated action yesterday, a Goldman, Sachs & Co. group priced and repriced $191 million Orange County, Fla, tourist development tax revenue bonds.

The MBIA-insured offering contained $25 million of Series A refunding revenue bonds, priced to yield from 3.70% in 1995 to 6% in 2010.

The offering also included $166 million of Series B revenue bonds priced to yield from 3.70% in 1995 to 6.05% in 2010. A 2014 term, containing $9.9 million, was priced as 6s to yield 6.162%.

A 2019 term, totaling $16 million, was priced as 5 3/4s to yield 6.223%. A 2024 term, containing $115 million, was priced as 6s to yield 6.277%.

At the repricing, yields on bonds in Series A and B were lowered by roughly five basis points across the board.

Bond in Series A are noncallable, while the series B piece is callable beginning Oct. 1, 2004 at 102, and declining to par in 2006.

A Merrill Lynch & Co. group priced and repriced $125 million Maryland Community Development Administration Department of Housing and Community Development single-family program bonds 1994 fourth and fifth series.

The series contained $38 million of serial bonds priced to yield from 5.55% in 2002 to 6.15% in 2008.

A 2011 term, containing $10 million was priced to yield 6.35%. A 2014 term, containing $12 million was priced to yield 6.45%. At the repricing, yields on both term bonds were lowered by five basis points.

The fifth series, which is subject to the alternative minimum tax, contained $87 million of serial bonds priced to yield from 4.50% in 1996 to 5.70% in 2002. A 2017 term, containing $14 million, was priced to yield 5.875%. The term has a super sinker and a 3.04-year average life.

A 2019 term, containing $9.8 million, was priced to yield 6.125%. The term has a super sinker and a 4.98-year average life. A 2026 term, containing $52 million, was priced to yield 6.75%.

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