NEW MEXICO

State Board of Finance staff director David Abbey labeled the state's' $92 million severance tax bond issue last week a success with an average yield of 5.35%. Prudential Securities led the winning syndicate.

The issue continues a trend toward borrowing more money based on the severance, or mineral, tax. The state legislature each year sets borrowing limits based on allotments for specific programs. The finance board then carries out the borrowing and distributes the money to different programs,

Starting in 1987, the state legislature has approved lesser borrowings ranging from $37 million in 1987 to as low as $10 million in 1990. Borrowing have risen steadily since then, Abbey said.

New Mexico is borrowing more because of declining outstanding debt and an improving economy. Money from the financing will pay for additional cultural and educational facilities.

-- Keith DuBay, Denver

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