Despite a recent onslaught of negative reports about its fiscal outlook, New York City was able to draw strong investor support yesterday for its $675 million offering of tax-exempt and taxable bonds at yields lower than what market specialists had been predicting.

As recently as last week, some investors were looking at yields in the 8 3/4%-9% range for the long bonds, and only Tuesday the uderwriting account led by Goldman, Sachs & Co. was discussing a yield in the vicinity of 8 5/8%. But demand for the bonds at the preliminary pricing yesterday morning -- close to $300 million in priority for Group A and Group B was reported by market sources -- was strong enough to allow the underwriters to trim the returns on the offering by five basis points. The yield on the Group B bonds was shaved to 8.55% from 8.60% and the return on the Group A bonds was reduced to 8.50% from 8.55%.

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