It was a tale of two bonds yesterday as talk centered on which 30-year Treasury issue to use as a benchmark for new offerings.

"The focus right now is what's happening with the bond roll from the old bond to the new bond," said Joe Mullally, a fixed-income strategist at First Boston Corp.

However, some traders interviewed yesterday thought the issue was much ado about nothing.

"It's just something entertaining to talk about," one said, adding that spreads on new corporate issues would obviously be adjusted depending on which benchmark was used. Another trader called the new 30-year "an aberration," and said it can't really be used as an appropriate level.

The spread between the yields of the Treasury's recently issued 6 1/4% bonds due August 2023 and the preceding issue of 7 1/8% bonds due February 2023 is about 18 basis points.

Normally, corporate offerings would be priced off the latest Treasury issue, a benchmark underwriters and issuers would favor in this case because it means lower borrowing costs, Mullally said.

But with the spread between the two issues so wide, investors are reluctant to pay what translates to almost two more points in price, he said.

A syndicate source observed, "It's never gotten this wide. Normally it waffles around five or eight [basis points]. Now you have 18."

Accounts, he said, were expressing a definite preference.

"What we're hearing from accounts is that they want to use the old bond," the syndicate source said.

Deals totaling $675 million were priced by late yesterday.

From Monday through Wednesday, Securities Data Co. shows 38 non-convertible corporate debt issues with proceeds totaling $7.072 billion. The high-grade market had 34 issues totaling $5.996 billion, while the junk market had four with proceeds totaling $1.076 billion.

In other news, MESA Inc. yesterday said it had completed its $600 million exchange offer for subordinated notes with a more than 97% acceptance rate.

"This exchange offer is a very important step in restructuring MESA's debt," said Boone Pickens, MESA's chairman and chief executive officer in a release. "It substantially reduces the near-term liquidity issues facing the company and increases MESA's financial flexibility."

The offer expired Wednesday, MESA's release says.

The $600 million of debt consisted of two $300 million issues. Holder of roughly $293 million of each series, or a total of $586 million, elected to accept MESA's package of secured and unsecured notes, convertible notes, and cash offered in the exchange, the release says.

"The exchange offer is a critical element of MESA's continuing debt reduction and debt restructuring program," the release says. "The company's $1.2 billion in long-term debt is the result of an aggressive natural gas reserve acquisition program and $1.1 billion in stockholder distributions between 1986 and 1990 in expectation of rising natural gas prices. Instead, natural gas prices declined steadily during that period."

The exchange offer's completion allows MESA to defer more than $150 million in cash interest payments through 1995, giving MESA substantially more financial flexibility, the release says.

In secondary trading, high-yield issues ended a quiet day unchanged. Among gainers were bonds of R.H. Macy & Co., which bounced up about a point following recent losses. Using the old 30-year as a reference point, spreads on comparable high-grade issues ended unchanged.

New Issues

Michigan Consolidated Gas issued a two-part first mortgage bond offering totaling $100 million. The first tranche consisted of $60 million of 5.75% amortizing bonds due 2001 at par. The noncallable bonds were priced to yield 50 basis points more than the current seven-year Treasury. The second piece consisted of $40 million of 7% bonds due 2025.

Noncallable for 10 years, the bonds were priced at 98.76 to yield 7.1% or 90 basis points more than the most recent 30-year Treasury bond. Moody's Investors Service rates the offering A2, while Standard & Poor's Corp. rates it A.

Federal National Mortgage Association issued $250 million or 5.16% medium-term notes due 1998 at par. The notes, which are noncallable for a year, were priced to yield 14 basis points more than comparable Treasuries. Dean Witter Reynolds Inc. was sole manager.

Franklin Universal Trust issued $75 million of 5.625% senior notes due 1998. The noncallable notes were priced at 99.913 to yield 5.645% or 62.5 basis points more than when-issued five-year Treasuries. Moody's did not rate the offering, while Standard & Poor's rates it AAA. Paine Webber Inc. was sole manager of the offering.

Potomac Electric Power Co. issued $100 million of first mortgage bonds due 2023. The 6.875% bonds were priced at 98.44 to yield 7% or 78 basis points more than the Treasury's most recent 30-year bond. Moody's rates the offering A1, while Standard & Poor's rates it A-plus. First Boston Corp. won competitive bidding to underwrite the offering.

First Bank System issued $100 million of 6.25% subordinated bank step-up notes due 2005 at par. The notes were priced to yield 99 basis points more than seven-year Treasuries and have a 6.59% internal rate of return. They are noncallable for seven years, after which the coupon steps up to 7.30% Moody's did not rate the offering, while Standard & Poor's rates it. A Lehman Brothers managed the offering.

Penn Power Co. issued $50 million of 6.37% first mortgage bonds due 2004. The noncallable bonds were priced at 99.183 to yield 83 basis points more than comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB. Morgan Stanley & Co. was lead managed.

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