DALLAS -- Danny Burger began the year with modest ambitions.

After the Texas bond industry closed 1990 with $6.7 billion in total municipal volume, Mr. Burger, executive director of the industry group Municipal Advisory Council of Texas, was hoping for better.

"I was knocking on wood for maybe $8 billion," he said.

He got that and more after total volume topped $11.2 billion this year, up 60% from 1990, the worst year in nearly a decade. Now, 1991 goes on record as the third-best year ever for the state and the third-best among states this year.

Aside from being pleased with the high volume and profits, Texas underwriters are optimistic this may be the first of many years of $10 billion-plus new money issuance as the state rebounds from a crippling oil, real estate, and banking crises in the 1980s.

"So far, 1992 has a real good feel to it. Rates are good and demand for capital is high," said Dale Henderson, senior vice president and manager of public finance for Rauscher Pierce Refsnes Inc. in Dallas. "There is quite a bit of optimism among the borrowers who are saying, 'Let's not put projects off.'"

He has reason to be happy. Like many, his firm had its best year since 1985 and was the highest-ranking Texas-based underwriter during a year that saw regional firms claim nearly more market share than they had in 1990 as senior managers.

According to Securities Data Co./Bond Buyer, the six Texas regionals that placed among the top 25 issuers managed 260 issues totaling $1.6 billion for 14.8% of the market.

A year earlier, the same firms claimed 10.4% of a smaller volume by lead managing 149 deals totaling $580.4 million.

Rauscher Pierce finishes the year as the only Texas firm among the top 10 underwriters with a volume of $840.9 million on 108 issues -- four times the number handled by number one Goldman, Sachs & Co.

The growth in market shar is due largely to Texas school issuance, which nearly tripled to $1.9 billion in 1991 amid uncertainty over the impact of a controversial school finance law.

The surge in school bonds was also good news for the state's regional-dominated financial advisory business.

First Southwest Co. of Dallas, which was bought out by a local group of investors in late September, was ranked number one as adviser on 209 issues totaling $2.426 billion in Texas. While the volume was ahead of 1990, the firm lost 8% of its market share, which slipped to 22.2% of all issues.

At the same time, Houston-based Masterson Moreland Sauer Whisman Inc. ranked second with 43 deals totaling $1.444 billion in 1991, according to Securities Data. Co./Bond Buyer. Rauscher Pierce was third, with a financial advisory volume of $803.6 million.

For Masterson Moreland, the strong ranking as a financial adviser was a fivefold increase from a year earlier. That was due largely to the major issues that two clients -- Harris County and Houston -- brought to market and to contracts the firm purchased from Kemper Securities Group in a January Deal.

Next year also looks to be a strong year for Masterson Moreland. In the first week of January, three of the firm's clients plan to sell $77 million of tax-exempt bonds.

"When we acquired the Lovett business in January, it changed the focus of our business," said Tom Masterson, chairman of Masterson Moreland, which until this year focused mostly on large issuers. "We now have a much more diverse business."

While the sale of Kemper's Lovett Underwood Neuhaus & Webb division meant the loss of one of the state's premier names, it spurred the development of other firms.

Former Lovett employees started Coastal Securities Co. in Houston, while members of the public finance department followed managing director Gene Shepherd to the local office of Baltimore-based Legg Mason Wood-Walker Inc.

"We've built our business back up after having zero contracts on Jan. 12," Mr. Shepherd said, adding that the firm has regained about 50 clients it had at Kemper.

Legg Mason was not the only firm moving more solidly into the Texas market this year. Two Dallas-based minority-owned firms, Walton, Johnson & Co. and Estrada Securities Inc., gained key roles in large underwritings.

Chip Johnson, chairman of Walton Johnson, said his firm has been involved with nearly $2 billion in deals since starting a public finance operation in February, adding, "We've had a great year."

Newcomers and veterans alike are bullish about the future for debt issuance in Texas for 1992 and beyond. Despite a sluggish national recession, the state is coming out of its 1980s downturn.

Investment bankers expect a sound economy to spur the need for new money issuance, particularly among cities and counties that have been largely dormant since the early 1980s.

An improved economy is also credited with a resurgence of issuance by municipal utility districts after five years. In February, the Houston City Council liberalized rules that triggered millions in advance refundings.

Tonight, the council may consider a further modification that bankers say would allow current refundings of the districts, which largely issue unrated debt.

Tom Cassell, vice president at Juran & Moddy Inc. in Houston, said that new rules could keep Texas firms busy next year. "There is a potential for $125 million in activity," he said.

Others say growing state issuance may also be a factor in pushing Texas bond volume to the $10 billion-plus mark for several years.

For instance, voters approved $1.4 billion in new debt programs in November. Already, $300 million of that has been sold, which state officials estimate will be part of a record $1.3 billion in new money bonds sold this fiscal year.

Texas Treasurer Kay Bailey Hutchison said a self-imposed limit on debt makes it unlikely that the state will use most of its $6.4 billion in authorization.

"I don't think we will issue a billion dollars every year. I think the limitation will have a very positive effect of making us prioritize how we use our debt," Mrs. Hutchison said yesterday. "I don't think anyone wants us to get in over our heads."

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