New York City, the municipal market's top bond issuer for the past two years, is expected to interview bankers next week in preparation for the selection of teams to underwrite its general obligation bonds.

The final choices, which should be made sometime this fall, will mark the first bond underwriting syndicates selected by Mayor Rudolph W. Giuliani and city Comptroller Alan G. Hevesi. Last year the city selected seven senior managers for its bond syndicate. City hall sources and Wall Street executives say the city is likely to have fewer this time.

The city will interview 21 firms next week for its GO bond syndicates, and will begin interviewing firms for its water authority financing team the following week, sources with knowledge of the matter say.

"Our next [GO] bond deal will occur sometime in October," said Michael Geffrard, first deputy of city Comptroller Alan Hevesi and a key player in the underwriter selection process. Bond underwriters are selected by officials representing the comptroller's office and those representing the mayor.

"The Water Authority will also issue debt soon," Geffrard said. "We [the city] will be an active issuer in the fall."

So far in 1994, the city has issued $2 billion of debt, ranking second to California's $5.8 billion in issuance.

In 1993, the city ranked as the market's top issuer of municipal securities, selling $5 billion of bonds in 28 issues, according to Securities Data Co., a financial information service affiliated with The Bond Buyer

The city also ranked number one in 1992, recording $5 billion in issuance. Both totals include refunding issues as well as new-money bond sales. The city's Water Authority issued about $1 billion of bonds in 1993, and ranked 39th nationwide. The Water Authority took ninth place in 1992, with about $1.5 billion in sales.

Given the vast quantity of debt sold, selection as a senior underwriter for New York City is considered one of the most prestigious banking slots on Wall Street.

Competition is fierce among Wall Street firms vying for the slots. In the past, the firms would spend thousands of dollars on campaign contributions to get the attention of the mayor and the comptroller, causing bitter political battles over selections to the various city underwriting syndicates.

While a new campaign contribution role limits how much Wall Street can give to municipal issuers, politics continues to play a role in the selection of underwriters and other positions, such as financial advisers.

In the summer, the city delayed the selection of its new underwriting team following a dispute over the selection of financial advisers. Comptroller Hevesi wanted two advisers: P.G. Corbin & Co. -- a Philadelphia-based firm owned by an African-American woman -- and the New York City-based Public Resources Advisory Group.

Giuliani Said only one firm was needed, Public Resources. In order to finish a refunding needed to plug a budget gap, both sides agreed to retain both firms on a temporary basis.

But the issue erupted into a racial dispute after Guiliani's duputy mayor for finance, John Dyson, criticized Hevesi for selecting Corbin, saying that the city can save money using just Public Resources and that the "comptroller ought to know a bid from a watermelon." Dyson was referring to the bid Corbin placed with the city to complete its advisory tasks. City Hall sources as well as those in the comptroller's office say negotiations are continuing on adviser selection "We're talking about financial advisers now," said one city source. "We haven't reached a fundamental agreement, but we continue to have conversations."

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