New issuance was light yesterday, but prices rose 1/4 point in moderate activity and traders reported a bullish tone.

Traders also reported good demand for secondary bonds in special situations.

The bullish tone was created by thinning municipal supply and an expected increase in demand fueled by July 1 bond calls, which by some estimates could run as high as $15 billion.

The market opened 1/8 point higher and added 1/8 point gains for a 1/4 point improvement by noon, eastern daylight time. High-grade bond yields were said to have fallen two basis points on average.

Some bonds managed 3/8 points on the day after Treasury prices moved higher, thanks to a strong dollar and calls for low long-term interest rates by Richmond Fed President Alfred Broaddus, traders said.

The debt futures market out-muscled the cash market. The September municipal contract settled up 14/32 to 101.17.

The September MOB spread widened slightly to negative 349 from negative 350 Friday.

Secondary traders reported only moderate action. But there was some customer selling and action, centered around several bid lists, one in the $55 million range.

Traders also said there was action around some sizable New York blocks up for sale, including $18 million New York State Dormitory Authority 5 1/2s of 2013 and $16 million New York UDC 5 3/4s of 2013.

New issues were scarce yesterday and supply appears to be thinning, a typical trend during the summer months.

The Bond Buyer calculated 30-day visible supply at $5.98 billion yesterday, down from $6.10 billion Friday. Secondary supply also decreased since Friday, reflected by The Blue List, which dropped $88 million, to $1.7 billion.

But the municipal market has already digested a sizable helping of new issues this year. According to preliminary figures provided by Securities Data Co., refundings through Friday, June 18, totaled $88.43 billion, the second highest annual total ever recorded. For all of 1992, a record year, refundings were $117.25 billion.

May 1993 long-term new issue volume has been revised upward to $27.8 billion from the $25.14 billion reported June 2. That gives last month the fourth highest monthly volume recorded, trailing the $59.08 billion set in December of 1985, $31.29 billion in November 1985, and the $29.64 billion in March of this year.

Dominating new issue activity today, Lehman Brothers is expected to price via negotiation $747 million Puerto Rico public improvement refunding general obligation bonds.

Outstanding PBA 5 3/4s of 2016 were offered at 5.83% late yesterday and traders said they expected today's deal to be priced in that range.

The New York City Municipal Water Finance Authority is slated today to sell $375 million of bond anticipation notes, its first sale of such securities.

WR Lazard, Laidlaw & Mead Inc. will serve as the offering's senior manager and bookrunner. Smith Barney, Harris Upham & Co. and PaineWebber Inc. will serve as co-senior managers on the trans-action.

New Deals

Among short-term pricings, First Boston Corp. tentatively priced $142 million revenue notes for the Michigan Municipal Bond Authority.

The notes, due May 5, 1994, were priced with a coupon of 3% to yield 2.55%. And $5.2 million notes, due July 28, 1994 were priced as 3s to yield 2.60%.

The offering is backed by a letter of credit proved by Comerica Bank. The managers said they expect Moody's to rate the issue MIG-1, the highest short-term tax-exempt rating.

New deals were also scarce in the long term sector. Dominating action, a 20-member syndicate led by Goldman, Sachs & Co. priced and repriced $95 million Greater Orlando Aviation Authority airport facilities refunding revenue bonds.

Yields were lowered by about three basis points on serial bonds in 2007 and 2008, while term bond yields were lowered by three basis points in 2013 and by about two basis points in 2018.

The final offering, subject to the federal alternative minimum tax, included serial bonds priced to yield from 3.15% in 1994 to 5.625% in 2008. A 2013 term was priced as 51/2s to yield 5.718% and a 2018 term, containing $41 million of the loan, was priced as 5 1/2s to yield 5.77%.

The bonds are rated A1 by Moody's Investors Service, A-minus By Standard & Poor's Corp., and A-plus by Fitch Investors Service, except for insured bonds. All bonds except those-in 1994 and 1995 are Insured by the AMBAC Indemnity Corp. and rated triple-A by the three ratings agencies.

In follow-through business, First Boston freed $237 million Southern California Public Power Authority San Juan Power revenue bonds from syndicate restrictions.

Merrill Lynch & Co. freed $91 million Massachusetts Water Pollution Abatement Trust revenue bonds to trade.

Traders said there were no quoted markets in the SCPPA bonds late yesterday, but Massachusetts serial bonds were said to be offered at the original net, less 1/4.

Secondary Markets

Apart from yesterday's bid-wanted lists, action was dull, traders said. Secondary market players have suffered through several weeks of listless trading, but anticipate increased activity as the July 1 bond call date approaches.

In secondary dollar bond trading, prices were quoted up 1/8 to as much as 3/8 point.

New York City 6s of 2021 were quoted at 6.15% bid, 6.12% offered; Orange and Orlando FGIC 5 1/2s of 2018 were quoted at 5.67% bid, 5.65% offered, and Dade County School MBIA 5 1/4s of 2023 were quoted at 5.72% bid, 5.69%s offered.

Boston 5 3/4s of 2023 were quoted at 98 1/8-3/8 to yield 5.88%; California Water 5 1/2s of 2023 were quoted at 5.74 bid, 5.72% offered, and Chicago GO FGIC 5 5/8s of 2023 were quoted at 97-1/4 to yield 5.83%.

In short-term note trading, yields were mixed on the day.

In late action, Los Angeles Trans were quoted at 3.35% bid, 3.25% offered and Texas Trans were quoted at 2.15% bid, 2.10% offered.

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