DALLAS -- What a difference two months can make.

When underwriters price $100 million of variable-rate debt for the Denver International Airport today, they expect to be as oversubscribed as they were in April with the sale of $500 million of fixed-rate bonds.

But things will not be quite the same. Last time, the projected had just been downgraded to near-junk status, and the city's top carrier, United Airlines, had not agreed to use the new airport when it opens in 1994.

This time, United has said it will use 45 gates at the airport, and city officials are upbeat about the prospects for an upgrade of their rating before a fixed-rate issue this fall.

"I think the gloom and the pessimism that surrounded the financing in the spring have dissipated," said Lee White, senior vice president at Kirchner, Moore & Co., a division of George K. Baum & Co., a co-manager. "If the city wanted to sell long-term debt they would have no problem today."

He is not alone.

"Clearly, the mood of the market is much better now," said Russell Heise, vice president and manager of public finance at Dain Bosworth Inc. in Denver, another co-manager for the issue. "They see that things are coming about as predicted."

Both firms will handle separate $50 million subordinated, non-alternative minimum tax revenue bonds that will be backed with the last of a $300 million letter of credit agreement with Sumitomo Banking & Trust Co. Ltd.

The new bonds are rated A1/V-MIG-1 by Moody's Investors Service and AA/A1-plus by Standard & Poor's Corp.

The high-quality paper will be the largest short-term deal in the market today and comes two days after New York State sold $3.9 billion of tax and revenue anticipation notes that were reoffered at a yield of 4.95%.

Kirchner Moore will handle the $50 million series structured with a one-year put, while Dain Bosworth will handle a series with a three-year put. Underwriters said they expect a yield of under 5% on the one-year, and 6 1/4% to 6 3/8% on the three-year puts.

"This taps a different segment of the market," airport Finance Director Gennifer P. Sussman said of the short-term structure.

The obligations, which will finance the construction of an access highway, parking garages, and related public-purpose facilities, is expected to draw interest from money market funds, insurance companies, and other insitutions, as well as some professional investors.

The issue is the second variable-rate deal by the airport. The first was a $200 million letter of credit-backed issue with maturities ranging from 30 days to nine months that was sold last year by Goldman, Sachs & Co., the senior manager.

Mr. White said the use of short-term debt will mean a lower borrowing cost and will enable the airport to retire the debt within five years of opening -- avoiding the rebate restrictions on long-term airport debt.

He said Denver should be able to retire the new bonds with anticipated revenues from the Federal Aviation Administration, the sale of the Stapleton International Airport site, and profits for the new airport enterprise fund.

Some market watchers speculated that the sale could have been delayed until fall and the seating of the new city administration.

Denver's Auditor Wellington Webb was elected mayor on Tuesday. While he supports the project, some investment bankers have speculated that he may make up the airport administration.

Despite the change of leadership, project officials said the funds were needed by July 1 so contracts for projects could be awarded.

Mr. Heise noted that the mood of the market has been strong for the airport project despite its low ratings, adding, "The secondary trading of the fixed-rate has been up."

The bonds began trading up last month amid rumors that United Airlines would sign a long-term lease for the new airport. Even though the airline has not formalized a commitment, they have offered a verbal pledge.

On June 13, Stephen M. Wolf, United's chairman and president, issued a statement saying the airline would continue its hubbing activity at the new airport.

"As contemplated by the new agreement, United will occupy up to 45 gates at an exclusive concourse B," Mr. Wolf said in his statement. "We believe as Coloradoans do in the future of Denver as a world transportation center ... Denver is second in departures only to United's Chicago hub."

Still unresolved is a package of incentives passed this month by the Colorado legislature designed to lure a $1 billion United maintenance facility to Denver. Gov. Roy Romer still has two weeks to sign the $150 million package of tax breaks and state-backed certificates of participation to win the United project.

Even though the pledge of United is bound to boost demand and help pricing for today's deal, the rating agencies are not ready to say an upgrade is likely.

"We're watching closely," said Todd Whitestone, managing director at Standard & Poor's. "As far as were concerned, there are still some hurdles to cross."

Standard & Poor's downgraded the project to BBB-minus this spring, citing concerns over a lack of agreement with United and noting that the only carrier to commit to the new airport was Continental Airlines, which had just filed for Chapter 11 bankruptcy protection.

The other agencies affirmed their ratings with Moody's Investors Service at conditional Baal and Fitch Investors Service at BBB on $1.4 billion of outstanding debt.

Moody's yesterday noted the impending pact with United in reaffirming its rating, saying, "The apparent commitment of United Airlines to 45 gates at the new airport, after years of opposition, is a positive factor underscoring the fundamental strengths of the credit."

But Gov. Romer told The Bond Buyer earlier this month that he had never had any doubts about the viability of the project.

"The airport is a good decision. It's a bold decision," he said. "We decided to expand and the economic conditions changed. We needed to respond to that change, but the long-term decision is still correct."

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