Munis still soft, slipping 1/4-1/2; new issues meet some resistance.

Municipal traders reported widespread weakness yesterday, with prices quoted down 1/4 to 1/2 point as yields continued to rise.

Traders reported a flood of bid-wanteds from the range of investors in the secondary market, and some bond prices tumbled nearly a point on the heels of Monday's 1/2-point losses.

"It's getting pretty grim," said the head of a major Wall Street trading desk. "People are on the defensive and trying to control damage. There are some painful positions out there, and it feels heavy to say the least."

The sour tone also was felt in the primary sector, where market participants acknowledged investor resistance.

"These bull market corrections are frightening," said David C. Clapp, a general partner at Goldman, Sachs & Co., which has underwritten a significant number of deals recently. "It suddenly drops like a rock, and the psychology goes way back. It's hard to hit this market."

In addition, the new-issue calendars have been growiong as borrowers eyed remarkably low rates. The pressure was significant enough yesterday for the Massachusetts Water Resource Authority to postpone until today its $300 million general revenue bond offering, according to an authority official.

In competitive new-issue action yesterday, $158 million of Missouri state general obligation bonds were won by Goldman, Sachs & Co. with a Canadian interest cost of $6.11%.

The bonds were reoffered to investors at rates ranging from 4.50% in 1992 to 6.35% in 2012. A 1992 maturity was not formally reoffered to investors.

An unsold balance of about $54 million was reported late in the session.

The bonds are rated triple-A by both Moody's Investors Service and Standard & Poor's Corp.

Goldman Sachs also won the $100 million Los Angeles Department of Water and Power, Calif., water works revenue bond issue, with a net interest cost of 6.63%.

The issue was priced to yield from 5.60% in 1997 to 6.60% in 2014.

A 2031 term is priced as 6.40s to yield 6.65%.

The term bonds were reported sold and the remaining balance totaled $18 million late in the session.

The issue is rated double-A by both Moody's and Standard & Poor's.

In negotiated new-issue activity, Lehman Brothers, as senior manager, priced and repriced $124 million of New Hampshire Housing Finance Authority single-family residential mortgage bonds to raise some yields by five basis points.

The final pricing included $50 million of Series C bonds priced at par to yield 6.35% in a 2017 super sinker and 7.10% in 2023.

There also is $74 million of Series D bonds, subject to the alternative minimum tax, priced at par to yield from 5.10% in 1993 to 6.95% in 2006.

A 2008 term is priced as 7.15s but not formally reoffered to investors, a 2010 term is priced at par to yield 7.20%, and a 2015 term is priced as 7.25s at par.

The issue is rated double-A by Moody's and A-plus by Standard & Poor's.

Goldman Sachs, as senior manager, priced and repriced $95 million of Metropolitan Atlanta Rapid Transit Authority, Ga., sales tax revenue bonds to raise yields five basis points on the long end of the loan.

The offering included serial bonds only priced to yield from 4.90% in 1993 to 6.40% in 2004.

The bonds are rated A by Moody's and A-plus by Standard & Poor's.

Returning to secondary action, traders said the market was suffering from illiquidity late in the session as bids weakened under the weight of a deluge of paper out for the bid.

In the debt futures market, the December municipal contract settled down 13/32 to 93.19, with the December MOB spread calculated at negative 130.

In secondary dollar bond activity yesterday,North Carolina Eastern 6 1/2s of 2017 were quoted at 95 3/4-96 to yield 6.83% and Georgia MEAG 6.60s of 2018 were quoted at 98 3/8-lock to yield 6.73%. Denver Airport 7 3/4s, due 2021, were quoted at 94 1/2-3/4 to yield approximately 8.22%. New York City Water Authority 7s of 2015 were quoted at 99 5/8-3/4 to yield 7.11%, while Triborough Bridge and Tunnel Authority insured 6 5/8s were qyoted at 98 5/8-7/8 to yield 6.71%.

Short-term note yields rose as much as 15 basis points yesterday and traders said yields were generally 50 basis points higher on the week.

Demand has diminished and there were few actively quoted markets yesterday.

In late secondary-market trading, Los Angeles Trans were quoted at 4.46% bid, 4.40% offered. Texas Trans were quoted at 4.45% bid, 4.35% offered and Pennsylvania Tans were quoted at 4.55% bid, 4.45% offered, New York City Rans were quoted at 5.10% bid, 5.05% offered.

In ratings news, Fitch Investors Service placed Connecticut's $325 million of general obligation economic recovery notes, expected to be priced today, on negative "FitchAlert."

The action was taken to express concern over a legislative movement to repeal the state's newly enacted personal income tax.

The agency currently rate the notes AA-plus and F-1-plus with credit enhancement.

Negotiated Pricings

A $40 million issue of Wymong Community Development Authority single-family mortgage bonds, federally insured or guaranteed mortgage loans, was priced by Bear, Stearns & Co.

The offering included serial bonds priced at par to yield from 4.75% in 1992 to 6.40% in 2001. A 2010 term is priced at par to yield 7.20% and a 2021 term is priced at par to yield 7.25%.

The bonds are rated double-A by Moody's and Standard & Poor's.

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