Municipal bond prices rose a quarter point overall Monday, as Standard & Poor's Corp.'s Blue List, which measures dealer inventories, dropped to its lowest level since September 1993.

"It's kind of a mixed bag," a municipal trader said yesterday. "Certain things that traded Friday were off a couple of basis points when they were out for the bid [yesterday], and early in the morning there were some trades out of the chute that were actually higher than Friday." In secondary activity, dollar bond prices ended a quarter-point higher, while yields on high-grade issues improved by two basis points, a municipal analyst said. Dollar bonds had been up as much as 3/8 point early in the afternoon. The analyst attributed yesterday's gains to the drop in supply, a shift in psychology, and the return of buyers.

Another trader added the: "We're getting a lot of support from outside sources that say bonds are a buy."

In debt futures, the March municipal contract closed down 14/32 to 84 19/32. Yesterday's March MOB spread was negative 448, compared to negative 442 on Friday. In the government market, the 30-year bond ended down 1/4 point, to yield 7.92%.

A third municipal trader said Delaware's $45-million competitive general obligation bond offering today should benefit from the lack of supply.

"There are no bonds out there, so I think it will do fine," he said. The trader pointed to yesterday's Blue List, which fell $158.9 million to $1.21 billion. Yesterday's level was the lowest since Sept. 14, 1993, when the Blue List sank to $1.1 billion.

"I think even if government rates take a turn up here, munis are going to out-perform them because of the lack of paper," the trader said.

Another trader, however, warned against reading too much into the Blue List's decline.

"Some paper has definitely gone away, but if you look at how much the arbs have now, that's offset a lot of the drop in the Blue List," he said. "Most of the arbs don't put their offerings in the Blue List."

A rich municipal bond contract triggered the arb buying, he said. The trader estimated that those buyers are holding several hundred million dollars or more of bonds. If so, that could bring the real inventory number closer to $1.7 billion or $1.8 billion, instead of $1.2 billion.

The trader added that other factors were also helping to keep a lid on the Blue List. There's not much issuance at this time of year, "and bond fund selling has slowed down quite a bit," he said.

In light primary activity yesterday, PaineWebber priced and repriced two San Francisco City and County Redevelopment Agency deals totaling nearly $116 million. At the repricing, yields on the $76.7 million hotel tax revenue bonds were lowered by 10 basis points in the 1996 maturity and by five basis points each in the 2015 and 2025 term bonds. That produced a top yield of 6.94% in 2025.

The $38.96 million lease revenue bonds were also repriced, with yields lowered by five basis points on the terms, resulting in a top yield of 6.94% in 2024. The bonds were backed by Capital Guaranty.

Also yesterday, Merrill Lynch & Co. tentatively priced $80 million Maryland Community Development Administration AMT and non-AMT single-family program bonds. The AMT bonds were priced with a top yield of 7.40% in 2025, while non-AMT bonds were priced with a top yield of 7.15% in 2017.

The 30-day visible supply of municipal bonds yesterday totaled $3.09 billion, down $94 million from Friday. That comprises $1.313 billion of competitive bonds, up $139.4 million from Friday, and $1.78 billion of negotiated bonds, down $233.4 million.

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